Hi .. was just after some advice …
I'm currently paying off a property at Rockdale in Sydney's South West that I paid $270,000 for in 2004 that I still currently owe $250,000 on… I'm thinking that it may not even be worth that now …
I get $250 rent per week. Would I be better of cutting my losses & getting out … or hanging in there & holding on to it for a few more years???Thanks
PatWell, firstly, I would never buy a property unless I am earning income from it from day 1 (i.e. positive gearing strategy). That's the key principle that I strictly adhere to and its worked well for me.
However, it looks like you are following a negative gearing strategy with the hope of making money through capital gains. If that is indeed your strategy, 3 years is way too short a time to expect significant increase in capital value (unless you are EXTREMELY lucky).
So the answer to your question depends on what your investment strategy is.
Hi Pat
I might be interested in buying. please email me details
nonasmall at gmail.com
cheers
Hi Pat
It depends on your financial situation. Generally I am against selling an investment property. Negative gearing is ok if it is reducing the tax you're paying in a significant way. Even if it was paying off the loan ie posively geared (as a lot of people seemingly go for albeit very dubious to achieve these days) it is only a good investment if it does have the potential to grow in capital value. All the pain and labour of having an investment that after 20 years has not risen much in value even though it's kept the bills paid seems to me to be a waste of effort and needless worry. There is only one way to invest in property and that is to buy for capital growth not the positve gearing by itself. If you seriously believe through your research and advice from others that is has a low chance of motoring ahead in value then yes take the plunge and get rid of it and go for something that might be negative geared that you can manage but make sure that you go for location, location, location or something that can be improved for future growth value. I have been investing in property for years and have done very well but like you I made a mistake. I bought a townhouse in Coffs Harbour which was an easy walk between the Plaza and the beach (seemed cheap but I was blinded by southern City prices) and the value did decrease in 4 years so I sold it at a loss and went on to something else that is better in terms of capital growth.
All the best
CarpeHave you raised the rent recently, you way be able to get a bigger cashflow if you raise the rent as the market rent may have increased, also look at managing it yourself for a year or two,
Also is you haven't done so allready Pay to get a depreation report done, your may be able to claim back a few years depreation in this years tax return, you'll most likly get a few thousand $$$ in your tax tax return, this can offset some neg cashflow.
Excellent advise from previous posts. I would check Real Estate agents in the Rockdale area to see what is the asking rent in that area and then increase the rent if it is warranted. Is a Real Estate agent managing your property? If he is ask him what the rents are.
What are your reasons for wanting to sell? Are you short of funds? If so is your loan set up as interest only? The depreciation schedule is a good idea.
If I was you I would not sell the property I think you will find that the property has gone up since you have purchased in 2004 .
Good luck
Unless holding on to it will cause you much financial stress and lifestyle limitations for a few years to come, I'd say definitely hold on. Forget complex analysis and heresay – just look at Sydney's property cycle for the last 50 or so years. Same story every 10 years. Booming for 3-4 years, flat or declining slightly for maybe 5 years, then coming up strongly again. Learn from history and hold on to it if you can, because you definitely will MAKE money if you do and lose money if you sell now.
But as I said, it depends on whether the sacrifices you need to make now are worth the potential financial gains that you will make later.
The sweet tastes sweeter after you've tasted the bitter!
All the best!
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