Hi,
Bought IP in the Whitsundays in QLD in 2006 as a naive, uneducated investor. Was given usual dream of "doubling money in 10 years etc". As this was pre-GFC, was given 110% loan to roll my existing car loan into (now I cringe at this).
End result: PP of $225k, car loan $30k, renos + purchase costs $15k. Total loan amount approx $275k. In one year, after a few minor renos IP was valued at $320k. I thought "great, this is easy". Come the GFC, coastal property prices crash and present day my IP is valued less than initial purchase price of $225k.
I have since paid roughly $30k off the principle, leaving the loan at $245k (vs. property value of maybe $210k). IP rents for $260 per week, BC + Rates approx $6k per year.
Should I cut my losses and get out? I.e. pay off a $30-$40k remaining loan. Will the bank even allow this? (ING) Or hold in the hope of capital gain? Area is near Bowen Basin in QLD, where coal is predicted to take off with the construction of port and rail line but that could be 2 years away.
Any advice appreciated. I've since made 2 successful IP purchases, doing well. I don't know whether it is emotional attachment to this, but it's an expensive lesson and I don't know what to do..?
Bought IP in the Whitsundays in QLD in 2006 as a naive, uneducated investor. Was given usual dream of "doubling money in 10 years etc". As this was pre-GFC, was given 110% loan to roll my existing car loan into (now I cringe at this).
End result: PP of $225k, car loan $30k, renos + purchase costs $15k. Total loan amount approx $275k. In one year, after a few minor renos IP was valued at $320k. I thought "great, this is easy". Come the GFC, coastal property prices crash and present day my IP is valued less than initial purchase price of $225k.
I have since paid roughly $30k off the principle, leaving the loan at $245k (vs. property value of maybe $210k). IP rents for $260 per week, BC + Rates approx $6k per year.
Should I cut my losses and get out? I.e. pay off a $30-$40k remaining loan. Will the bank even allow this? (ING) Or hold in the hope of capital gain? Area is near Bowen Basin in QLD, where coal is predicted to take off with the construction of port and rail line but that could be 2 years away.
Any advice appreciated. I've since made 2 successful IP purchases, doing well. I don't know whether it is emotional attachment to this, but it's an expensive lesson and I don't know what to do..?