Financial disaster prompting action

:eek:
OK, I screwed up big time and bought a house in Gladstone in 2012. I expected there to be high demand for rentals for a longer timeframe than there really was, and we have hung onto a dead horse for way too long.

Hubby has finally agreed to sell it and carry forward the loss against future IP capital gains. Yesterday when I got it valued it's potential price has dropped yet again (thanks real estate agents for suggesting we not sell back at the beginning of the year). It is now $100K less than I paid for it, more taking stamp duty into consideration. Mark still said to sell it last night, as it is such a pain dealing with tradies up there, we get slugged an additional insurance premium after the big storm last year, and when the current tenants move out, the rent will fall to an abysmal amount. It is most likely stopping us from refinancing and buying something else that will recoup the potential loss.

What do you think about trying to vendor finance it? Or would a VF agent just try to buy it off us for an even lower price than the open market. I don't need the hassle and expense of getting a license if I'm not likely to use it again. On the other hand, will a license open more opportunities down the track if I start some kind of real estate business.

We plan to write to the tenants and ask them if they would like to purchase it.
Thanks.
 
:eek:


What do you think about trying to vendor finance it? Or would a VF agent just try to buy it off us for an even lower price than the open market. I don't need the hassle and expense of getting a license if I'm not likely to use it again. On the other hand, will a license open more opportunities down the track if I start some kind of real estate business.
.

That also may cause more problems then you already have and the prices in Gladstone are only going one way from a over supply,that's one item the fast buck gurus who were sold on Gladstone did not tell the investors that lined up from 2011,the fly out-in workers do not rent in Gladstone some management do but not the fly-in-fly out crew don,t..imho..
 
I don't think I'd go down the vendor finance route. They're likely to want to buy it from you for less than current market value.

Some things to think about...

If you sell, will you walk away with some money in your pocket?
* Yes, then you consider selling and buying elsewhere to be moving your money and putting it to better use.
* No, then you're crystallizing a loss. You might do this because the tax benefits from declaring a loss make sense or because continuing to hold the asset will only increase the losses.

If you don't sell, will the property cost you money to hold?
* If it costs you money, then it's hemorrhaging cash-flow and it may be best to cut your losses and get out.
* If not, then whilst it may have dropped in value, it may be worth holding until it recovers (assuming it will recover). At this point it may only be a paper loss, selling will make it real.
 
How do you loss a 100k on this if you bought in 2012; it should of went up 100k in 2013.

Gladstone definitely is not well represented by what has happened across Australia in the last 5 years - it went up when most places were on the decline, and now that other places are on the rise it is now declining.
 
Gladstone definitely is not well represented by what has happened across Australia in the last 5 years - it went up when most places were on the decline, and now that other places are on the rise it is now declining.

Arrrr, I'm getting Gladstone confused with a suburb in Sydney.
 
Peter, there is no way it is going to go back to the price we paid in 2012. Yes we will be crystallising a loss. Had we sold when I first thought to, the loss would only be half what it is today.

Thank you to those who understand the situation. I suspected VF would not be any help, but worth asking.
 
Hey Will, how would you like to get yourself a nice family home on a corner block two minutes drive from the shopping centre and schools? Ten minutes drive to the marina and 7 minutes to the CBD? Tenants on long term lease paying way above market rent. Nice new outdoor entertainment area built after the last cyclone. Really cheap by Sydney standards!




Come on everyone, I've gotta have some fun here
 
Peter, there is no way it is going to go back to the price we paid in 2012. Yes we will be crystallising a loss. Had we sold when I first thought to, the loss would only be half what it is today.

Thank you to those who understand the situation. I suspected VF would not be any help, but worth asking.

As I have said to others, do consider that even at a reduced price, your property in Gladstone might sit on the market for quite a few months before it sells. May want to consider a marketing strategy.
 
As I have said to others, do consider that even at a reduced price, your property in Gladstone might sit on the market for quite a few months before it sells. May want to consider a marketing strategy.

Like what?
The Managers have already said that adding an extra bathroom wont make any difference. Other than the features mentioned above, what can you think of? You are the expert on the region. I was thinking a few welding accidents at Calliope and Benaraby might help :)

We don't care if it takes ages as long as it is before the lease expires in March.
 
Like what?
The Managers have already said that adding an extra bathroom wont make any difference. Other than the features mentioned above, what can you think of? You are the expert on the region. I was thinking a few welding accidents at Calliope and Benaraby might help :)

We don't care if it takes ages as long as it is before the lease expires in March.

I think you'll have more luck marketing to target owner occupiers rather than investors in the Gladstone market at the moment as they are more active in the current declining market. Having tenants in the property may affect the ability to be able to do that. In any case, discuss your options with the REAs, my opinion is not professional advice! :)
 
Hi Angel,

We have similar problem in different location - Emerald.

Dilemma on whether to take a big hit now or wait (but for how long?) & hope something positive happens with projects in the area finally taking off one day.

A crystal ball would be good!

Anyone else got property in Emerald? Would be keen to see others views.

Thanks in advance
 
google the vendor finance institute.
Might lead you to find more doing vendor finance and who could assist. The crux is finding someone who wants your rental as a home. Can you find them or do others have ways to find the end user.
 
I was thinking a few welding accidents at Calliope
Played in my first QLD Pro-Am event at Calliope..not a blade of grass on the joint except for the greens.

The place is pronounced "Kal-eye-o-pee", but my mate and I didn't know this (for some reason noone had corrected us on the pronunciation up until this point), and went into the local pub not long after checking into the caravan park, and had to mention the name of the place during a conversation.

We called it "Kal-eee-ope".

Nearly got our heads punched in by the boyos at the bar.. :p..."bloody tourists"

We went to the supermarket (doubled as the video store and post office) to get some supplies for the caravan, and there was a small kangaroo walking up and down the isles. True story.
 
Hi Angel

I wouldn't write off snaffling a vendor finance deal. It might be worth advertising it and see what you can come up with.
 
Played in my first QLD Pro-Am event at Calliope..not a blade of grass on the joint except for the greens.

The place is pronounced "Kal-eye-o-pee", but my mate and I didn't know this (for some reason noone had corrected us on the pronunciation up until this point), and went into the local pub not long after checking into the caravan park, and had to mention the name of the place during a conversation.

We called it "Kal-eee-ope".

Nearly got our heads punched in by the boyos at the bar.. :p..."bloody tourists"

We went to the supermarket (doubled as the video store and post office) to get some supplies for the caravan, and there was a small kangaroo walking up and down the isles. True story.

I find it funny every time I go down to Calliope now - it's like a small town that tries to present as a place that is much bigger than it really is.

Not only is the amount of new housing down there overkill, but so too is the new infrastructure that has recently been built. The largest motorway standard interchange outside SEQ has recently been completed there as has a few sections of the highway. There were no traffic lights a year ago, now there are three with more probably on the way (even though there's hardly any traffic).

Then there's also the temporary accommodation still going up around Calliope.
 
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