in a crossroad re selling or hold

hi all,
always a lurker and learner and now appreciate if i can get feedback on our current position

3 IPs:

All loans are with westpac, interest only and stand alone (non cross colateralised). interest is 4.83 p/a

1. WErribee , loan $178k, value $245k - purchased in 2007
Rent $240 p/w as of next month
2. Pakenham, loan $260k, value $295k - purchased in 2010
Rent $315 p/w
3. Seaford, loan $221k, value $275k; purchased in 2009
Rent $265 p/w

last financial year 13/14 based on my spreadsheet, our negative gearing costs for all three was $8893. This is pre tax and depreciation deduction.

our seaford property is my concern, i cannot believe our luck with this one. last tenant did a runner in january and we are now taking our current tenant to vcat due to arrears.
own corp is also an issue, unjustified levy, legal fees and not responding to queries. long story short we are also being taken to vcat by them as we are disputing their legal charges.

our pakenham property atm costing us $4k in gutter repair. im sad but ok with it as i do believe given the location, this one will be ok in a long term

i just feel like we need to cut this loss and move on. am i failing to see the big picture here? not too happy about the capital gain however could be on par with melbourne market as a whole in recent years.

i dont know, i just need a bit of reassurance or perhaps firm kicks to finally do something.

We have been pretty complacent with our properties so far but really not want to lose on opportunity costs going forward.

thanks in advance.
 
Hi Winnie,

Well done on making the decision to invest in property.

[QUTE=winnie;1245203]
We have been pretty complacent with our properties so far
.[/QUOTE]

IMO this is your problem and the reason you are not so happy with your position at the moment. I would suggest that you reassess your goals, plans, strategy and approach, to one that will realign you to achieving your goals, whatever that may be.

Good luck.

Leo
 
i just feel like we need to cut this loss and move on. am i failing to see the big picture here? not too happy about the capital gain however could be on par with melbourne market as a whole in recent years.
I can totally relate to this. I live in Perth and have a rental in Melbourne. It is at the lower end of the market and I have had maintenance issues, issues with tenants and have had the value boom and bust twice since I bought it :eek:

I feel very disconnected from this property since I live so far away and sometimes I am sick of it and I just want to sell.

However, this property forms a solid part of my investment strategy and I will be working towards improving the value and cashflow of the property over the next few years. Because it is part of my investment strategy, I am glad that I have held onto it.

I agree with Leo that you need to re-evaluate your strategy and see if this property forms part of that strategy moving forward. Take a step back and look at the numbers. I know I have to do that when things go wrong.
 
Winnie,
I agree with LeoT, you should look to see if your holdings are achieving what you want. While property should be a long term buy and hold decision for many (due to the high transaction costs) it does not mean that if you have a dud or that the properties you hold are not benefiting you, that you should not get rid of them.

The areas you have purchased in are generally lower socio-economic areas, a long way from CBD and generally in suburbs of lower capital growth as compared to other areas of Melbourne. That doesn't mean they cannot work but the properties need to match what tenant demand is in those areas.

I think you need to work out what you want to achieve and see if these properties are helping you do that. Most times a good PM will help mitigate poor tenant selection and issues of arrears, but there are times when stuff happens and it is just part of the whole deal. As to the owner corp issue, often the only way to change this is get involved to force the changes, otherwise you may need to decide too hard and too costly so move on and sell.
Good luck with it.
 
thanks for the feedback.
had a proper discussion with hubby and decided we will do the following:

- seaford, definitely will sell this, however will tackle the current problem re tenant and body corp before selling. our timeframe for this is 2 financial years max. we could sell now but prefer not to as we dont want to sell in haste.

- pakenham and seaford, we will continue with these two whilst monitoring the holding costs. the trends for the costs from last 3 years were decreasing so we are hopeful..slow but steady.

- be more efficient with our finances. we do not have bad debts atm so i guess thats a good thing. any spare cash will be plonked into the property loans to reduce interest.

- get part time work sorted for next year (currently on mat leave)

and continue educating ourself with property. just paid for my API subscription right this minute and be more active in this forum.
 
cheers marg

thats exactly what we do. the 3 loans are still interest only and one offset account ofsetting one of the loan, which we direct all spare cash into.

after we sell seaford, we will decide if we want to move into our pakenham property (i really like this one) and sell our current ppor.
 
Back
Top