Advice, in a bad situation

[joe88]

Hi,

I am not an investor yet but would like the advice of those in property rather than members of a generic forum.


Approx 1 year ago we sold our PPOR to find a bigger better house for the family. After a lot of searching (nearly 1 year) we purchased a place (approx. 100k more than original place). This is now something I hugely regret. After living in the place a few months it feels like a real step back in terms of the house size/layout, block, area (not family friendly) and finish/quality of the place. I still don't understand how we came to this decision, buyer fatigue??

To make matters worse I now believe I paid approx. 20% too much for the place (approx. $100k).When comparing recent sales in the area we were comparing against similar houses not realising the houses we were comparing to are on blocks that can be sub divided, where as ours isn't. Its now evident that this is a huge factor in prices here. Yes I feel like a fool.

We did have a 20% deposit on the place and it now seems if I sold today we would barely come out with a dollar. There was over $30k in fees to purchase this place as well. This makes selling up again and buying another place very difficult as we don't have much in the way of other assets/savings.

I am really at a loss as what to do next. I feel I have taken my family backwards in where/how they live and blown all of our savings/equity. I don't want to lay down and accept defeat, I want to look at ways forward of getting my family out and to a better place. I have spent the past weeks thinking of some strategies to put ourselves in a favourable position in say 5 years, including buying a decent investment property and getting growth from that (have some savings to put towards investment), perhaps switching this place to a investment property and selling (making a capital loss???). All just thoughts and I would appreciate any advice, guidance or support from fellow members on here.

 

[TMNT]

How did you manage to pay 30k in fees to buy? Unless your property is 1m+ and the 30k is stamp duty?

So you "upgraded" the house by buying another one 100k more but think its 100k overpriced and poor layout/size/design etc?

Ouchy!!!!!

I assume it's south aus as well?

 

[joe88]

Yes ouch indeed. Yes property in SA. Property was under 550k, fees and stamp duty in SA is ridiculous, that's with no LMI. Look I may be exaggerating what I may have overplayed but I'd say at least $50k, but none the less its not feasible to simply sell now and look again to buy.

 

[wylie]

I'm guessing the $39K included sale commission on the old house and stamp duty on the new place?

Do your wife and kids feel the same way? Are they blaming you?

I'd look at using your savings as deposit to get a place you are happy with as new family home. Change to interest only and pay bare minimum on the house until you find your new PPOR. Turn this house into an IP if that works financially.

Even if this house isn't the one you would choose for an IP you are up for similar costs in and out to buy a better IP so if you can make this one work as an IP why not?

 

[joe88]

Yeah thanks. The exact sort of suggestions I am after.

 

[Richard Feynman]

First up, don't look back in regret. Learn from it and look forward.

As wylie suggested, perhaps you can make your PPOR work as an IP and either buy or rent a new PPOR.

 

[marg4000]

Look, you have only been there a few months. You are probably worn out after a stressful year of moving and searching for an new home.

Sounds like a case of buyer's remorse. It is common for a "better deal" to come along once you have signed on the dotted line.

For now, I suggest you focus on the good points of the property and wait a few more months before taking any action at all.

It takes a while for any new PPOR to feel like "home".
Marg

 

[pully]

tend to agree with wylie. it is expensive to buy and sell and yes especially in sa because of costs.

are you unhappy about the location? sometimes the large new homes are in areas with little or poor amenities. perhaps it would rent well and over time sell well. if you paid too much it may take longer to recover or it may be in an area with poor cap growth.

location can be more important than a large new house that will be your decision. wish you well and good luck in finding a place you can call home. if you can keep this property and buy another 1 you like. good luck.

 

[THEGREAT888]

Hi,

I am not an investor yet but would like the advice of those in property rather than members of a generic forum.


Approx 1 year ago we sold our PPOR to find a bigger better house for the family. After a lot of searching (nearly 1 year) we purchased a place (approx. 100k more than original place). This is now something I hugely regret. After living in the place a few months it feels like a real step back in terms of the house size/layout, block, area (not family friendly) and finish/quality of the place. I still don't understand how we came to this decision, buyer fatigue??

To make matters worse I now believe I paid approx. 20% too much for the place (approx. $100k).When comparing recent sales in the area we were comparing against similar houses not realising the houses we were comparing to are on blocks that can be sub divided, where as ours isn't. Its now evident that this is a huge factor in prices here. Yes I feel like a fool.

We did have a 20% deposit on the place and it now seems if I sold today we would barely come out with a dollar. There was over $30k in fees to purchase this place as well. This makes selling up again and buying another place very difficult as we don't have much in the way of other assets/savings.

I am really at a loss as what to do next. I feel I have taken my family backwards in where/how they live and blown all of our savings/equity. I don't want to lay down and accept defeat, I want to look at ways forward of getting my family out and to a better place. I have spent the past weeks thinking of some strategies to put ourselves in a favourable position in say 5 years, including buying a decent investment property and getting growth from that (have some savings to put towards investment), perhaps switching this place to a investment property and selling (making a capital loss???). All just thoughts and I would appreciate any advice, guidance or support from fellow members on here.

There are many more people, whom have purchased their properties ( PPOR dweller and property investor)much higher than what they originally committed to.

At least in your case you could learn from this experience.

Most people have one good and positive opportunity in life. I wish that your one is on its way.

I wonder if the boom in the area you purchased already at its peak. If no, then your property would eventually gain some growth in the next couple of years. If yes, then the gain will still be there in a longer term, say in a decade.

Looking back, even the housing commission area have had its share of growth.


So brainstorm your options and choose them in the order of priority and hopefully your goal will be achieved sooner rather than later.


Regards

t

 

[Spades]

For now, I suggest you focus on the good points of the property and wait a few more months before taking any action at all.
Marg

Above is sound advice imo.

Also if your ppor becomes an ip,it maybe better to rent,rather than buy and then save for a deposit + costs for another ppor.

Don't feel like a fool but take it as a lesson.

Good luck.

Cheers Spades.

 

[joe88]

Thank you all for the advice and support, its not often you see that on an Internet forum, which says a lot about this forum and it's members. I think I will give things 6+ months before making any decisions and save hard in the mean time.