should i hold or sell with loss??

[bigfella966]

Fire in the hold!

anyone who knows me will tell you I always give of myself 100% but sometimes, especially if the need calls for it, can be (brutually) direct, to the point of being INSULTING (sorry, I tend to use capitalisation only as a means of emphasis, and as for the multiple exclamation/question marks !!!???....sticky keys no seriously, just force of habit, I will try and get professional help for it, I promise)

Thank you for your post, I accept your criticism; it is a fair comment and I will try and contain my "enthusiasm" per se.

Mono,

DON"T get help!!!!, DON'T contain your "enthusiasm"!!!!, SPADES are SPADES!!!

I'ys jus luuuuvs a hot chilli eatin, fire breathin, wild passioned, Firey REDHEAD!!!!

BF
(oops, sorry about the CAPS and !!!!! )

 

[ggumpshots]

Hi All,

In the peak of the boom in 2003 i bought a unrenovated 2br fibro house (12.12 X 45m) in the western area of sydney for 346k(borrowed 350k). Several months later interest rates rose twice. This was the beggining of the deflation of the sydney bubble... I was initially keen to jump in to the property market and im the first to admint that i didnt research properly. I was left stuck with a property on a street far from station (4min drive) and with some housing commision on my street. 2 weeks after my purchase my direct neighbours sold for 375 and 395 however now I have not been able to sell ir for even 340k... I payed 10k renovations and over 10k stamp duty plus i borrowed 100%. This was an inestment property and is currently returnuing 860 a month.

I would love some advice on where to go from here.. it has been on the market for 1 year now.
'''should i do some more renovations ( eg.. drievway and landscaping) and try to resell
''''should i sell it even if i am left with a 10-15k mortgage?? and buy something else...
should i hold onto it????

Any insight would be great... Thanks

you shouldnt sell as you dont appear to know what direction to move in....buy something else!!...you will likely just buy another mistake.... if you have been trying to sell for a year then you should know where these funds will be going...do you know?.....Your loss is small . Ride it out. The price in 2 years time may surprise you. Quiggles has some good advice....unless you are desperate though you should hold
Given the limited info that would be my limited response.

 

[Monopoly]

**************************************
Hi Jo,

1. Let us leave GeorgeSA's case aside for the time being....With due regards and I am not criticising you here... I am just simply curious to know for my own self education purposes, is it common for many young Australians to be able to make their own independant decision at the age of 26 when the likely consequences and impact is equivalent to about "A$350,000"? And How do parents actually go about teaching their children about such decision-making skills in Australia? What is your own life experience like when you were 26 then?

2. I know in Singapore and for many of my generation of young adults then, generally speaking, "A$350,000" is indeed a very big sum of monies and normally we will defer such major decision-making to our parents or proactively make our own independant decisions after much due consultation with our parents.... (Of course if you were to ask the younger generations of Singaporeans today, many of them have no qualms of making such decision by themselves at all, (without informing their parents beforehand) and perhaps even when much bigger amount of monies are involved. Some of them only get their parents involved in the decision after they have been bankrupted and looking forward to their own parents to "bail" them out, as a last resort before facing the actual consequences of being bankrupted legally speaking.)

3. I am presently thinking how to effectively teach my own children about financial literacy and how as parents we can effectively support their learning process, without having to lose too much monies ourselves for them to truly learn their lessons in real life situations. This is in addition to what Robert Kiyosaki is teaching about financial literacy for the children and the teenagers though his books and cashflow games methods.

4. I look forward to hearing and learning from you, please.

5. Thank you.

regards,
Kenneth KOH

Kenneth,

At 26 I was the mother of a 7 year old boy whom I only got to see for about 40 minutes 6 days out of every 7 because I was working 3 jobs. The only full day I had with him was on Sundays, in which I tried desparately to redeem myself as a responsible quality-time giving mother.

My son is now 23, just 3 years older than George. And I would be as direct with him today (maybe even moreso) than I was with George.

I don't know George personally, but I have read ALL his posts, and in what I have read, I see he has a long road to travel, and much to learn, not just saying "yeah I've learnt" but ACTUALLY FEELING the full brunt of his actions, of which if he really was feeling the pinch of his mistakes, would not even entertain the thought of buying more property UNTIL the current situation/mistake was remedied.

I have said enough/too much already. I would like to finally add, that by your posts, you appear to be a kind and caring individual KOH; don't stop what you're doing and please, don't ever change!!

 

[Monopoly]

Mono,

DON"T get help!!!!, DON'T contain your "enthusiasm"!!!!, SPADES are SPADES!!!

I'ys jus luuuuvs a hot chilli eatin, fire breathin, wild passioned, Firey REDHEAD!!!!

BF
(oops, sorry about the CAPS and !!!!! )

Back at ya doll-face!!!

 

[Kennethkohsg]

Hi Kenneth,

Does it really matter when i sell? If i make a 100k property and then buy another house then the other house will be worth 100k more anyway. So if i sell and buy in the same market then i have not really lost yet untill I sell the second house. Do you see my point?

I believe the next house i will buy will be a much better purchase and more vulnurebale to captal Gain.(GW) Whereas this property will increase in value but not as much as other houses in the area. This is my fault due to not enough research but I know I will never make the same mistake twice..

What do you think Kennethkohsg?
thanks

+++++++++++++++++++++++++++++++++++
Dear GeorgeSA,

1. You ask, "Does it really matter when i sell?"

Comments: Of course, it does! I am wondering why you are not " prepared" to do your own research on the Syudney property market, as suggested by Ajax and myself. This is part of your required due diligence process in order to make a well-informed investment decision.

2. You says that, "If i make a 100k property and then buy another house then the other house will be worth 100k more anyway. So if i sell and buy in the same market then i have not really lost yet untill I sell the second house. Do you see my point? "

Comments: Honestly speaking, I think you have failed to realise the fallacy and the real flaw behind your own line of thinking to date.... If you adopt this strategy, what I can and will see, is that you would have immediately lost monies on the 2 set of stamp duties paid, mortgage/legal costs and sale commission when you sell the the first properties, not to mention the time and energy involved... Morever, what guarantee do you truly have that you will definitely make monies on your second property investment;- especially when you are not prepared to do the required due diligence process so as to make a well-informed decision yourself.


3. You says, "I believe the next house i will buy will be a much better purchase and more vulnurebale to captal Gain.(GW)"

Comments : I disagree. See my a/m comments.


4. You says, "This is my fault due to not enough research but I know I will never make the same mistake twice."

Comments: By your present attitude and continued failure to do your required due diligence in order to make a well-informed decision, I am not sure if you seriously mean what you say here or/and that you have truly indeed learnt the correct lessons, from your first investment decision-making process.

5. Please note that I am not trying to change the final outcome of your decision here.

6. However, I hope that I have clearly pointed out to you, some of the existing flaws in your own thinking process especially with respect to your underlying weak premises, assumptions, presumptions and generalisations used as in this post, by using this " point-to- point" rebuttal method, so that you may seriously self-reflect and subsequently self-correct them where neccessary, please.

7. For your kind update and further comments, please.

8. Thank you.

regards,
Kenneth KOH

 

[Kennethkohsg]

Hmmm....215 is a great deal less than if you were paying commission to an agent to manage the property. But then again, I guess having "relatives" who are looking after the place as opposed to total strangers is worth the reduced income. So why are you complaining??? Because the light has finally come on (knock, knock....ahh hello....) business and friends/family is a bitter cocktail (at best). Quit whinging about being "embarrassed" and make up your mind, you are either a property investor for the money or for the fun of it, either way, determine what your goals are and let those goals dictate how you will handle the less desirable tasks required of you as an INVESTOR!!! You say you don't mind the reduced rent, yet you post about it, so perhaps it does not sit as well as you want to believe it does (honesty with yourself is a number one priority).

Let me ask you this George/Tiger, what price would you accept??? Remember, be honest with yourself first and foremost, before you attempt to fool others with your ambiguity.

****************************************************
Dear GeorgeSA

1. To help me further understand you and your line of thinking better, can I ask you, "What exactly was your thinking then, when you decided to rent the house to your relative for a lesser rent from $240 per week to $215 per week?

2. Do you actually forsee that one day you are going to have this "embarrassing" task of telling your relative that you are going to increase their rent or/and even tell them to leave your house at their inconvenience time/occasion when you first decide to rent out your house to your relative for less rents?

3. Have you actually conducted your own independant research to date, as to how the Sydney property market will evolve out over the next 2-5 year time frame ( as well as the nature/duration of this property cycle trend/stage), as previously suggested by Ajax and myself when you were making the decision to rent the house to youyr relative then?

4. Did your own research shows or/and have you correctly anticipated how the market rental and house prices will move eventually when you make that decision? If yes, why then make this decision? If not, what can you learn about your own research and about yourself again?

5. Monopoly thinks that you are "complaining" about your present rent, are you?.. Do you have any difficulty staying committed to your own decision even if the decision made eventually turned out to be a "wrong" one, as in the eyes/minds of many other investors?

6. Imagine if you can re-decide again retrospectively, how will you re-decide now, knowing that the house rental market is actually on the increase, way in advance this time round?

7. Honestly speaking, what is your own thinking about involving family/relatives/friends with business deals, both before and after the a/m post by Monopoly?

8. Monopoly has suggested that " Quit whinging about being "embarrassed" and make up your mind, you are either a property investor for the money or for the fun of it, either way, determine what your goals are and let those goals dictate how you will handle the less desirable tasks required of you as an INVESTOR!!!". What do you said about that?

9. Honestly speaking, for how much are you truly prepared to sell off your property presently, having made a decision to sell your house at a loss in the past? Monopoly is also asking you the same question in her post.

10. Beside the house prices, what are your other key considerations for your house sale to effectively take place in the near future?

11. How do you think/reckon the market prices for houses in the Sydney property market, will actually move over the next 1-3 years time frame, based on what you known presently? How then will you decide?

12. How sure and how committed are you , of your own projections/views and of your own decision made subsequently regarding the house sale and the likely market movements?

13. What have you learnt from your property sale marketing experience so far?

14. Looking forward to your honest replies and for further discussion, please.

15. Finally, can you please confirm for us here, whether "GeorgeSA" and "TigeGT" is actually the same person, as some of us have previously thought so until Les "corrected" us recently.

16. Thank you.

regards,
Kenneth KOH

 

[Twitch]

FWIW, I believe that GeorgeA is TigerGT. Have a look at the original posting, it now displays that it was posted by "TigerGT", even though at the time it was posted by "GeorgeA".

I'd like to know how to pull that trick, I don't like my user name (no I wasn't born in 1992 ) but can't figure out from digging through the menus under "usercp" how George pulled it off.

 

[Monopoly]

KOH,

I must say I am somewhat bewildered by your post directed at George/Tiger, and the way you proceed to reiterate my comments, almost as though he were incapable of deciphering for himself the meaning of same.

Do you not consider this to be somewhat condescending??? After all, he may only be 26 but I do believe him capable of translating my words in the manner they were delievered/intended.

If I may offer you a word of caution, be careful in how you question this young man, such a post may instil resentment towards you (and not just for myself, as I half expect him to, after all it was I who so harshly accused him of "whinging" in the first instance). Personally, how he reacts to my post in neither here nor there for me, but I don't want to see you fall out of favour with George/Tiger.

You have shown far more empathy and interest in him than anyone else here, so please tread gently and do not jeopardise his confidence in you.

Cheers,

Jo

 

[thefirstbruce]

Kenneth, excuse me for not responding to your ongoing posts to this thread, but I honestly feel I have said all that can be said in support of my stance....

how about you????

 

[Kennethkohsg]

Dear thefirstbruce,

Where?... You mean that we agree to disagree?
...It's fine with me if you prefer to leave things as they are now.
Thank you

Cheers,
Kenneth KOH

 

[Kennethkohsg]

KOH,

I think that perhaps YOU are the one who is "emotionally involved" with this thread, or rather, are taking on George/TigerGT's case too seriously. Personally, I couldn't give a rats; I'm sitting here in fits of laughter. I just have a tendency to call "a spade a spade" at times especially when I think it serves a greater purpose than patronising posts which do nothing to contribute to one's learning (in this case, being for George/Tiger's benefit).

I appreciate the fact that you are trying to be helpful, as are many others here, but it has dragged out for so long only to go round in circles. Which clearly indicates (to me) that albeit he has benefitted from reading the opinions of others, and maybe even having gained some therapeutic benefit in bearing his soul re his misfortunate property purchase, but should i hold or sell with loss?? I mean, after all the comments (mostly yours KOH) George/Tiger keeps coming back to the same corner.....oh but wait, NO..he has put it on the market (well he was going to do that anyway; if you read his first few posts, his mind was made up even before the thread got to page 2) he was just using the forum as a sounding board. He has learnt NOTHING, and your lengthy empathetic posts have been (IMO) totally in vain. And FYI, I was one of the very first posters who actually said "ultimately, it is your decision" and wished him well. That is unchanged, I respect that it is HIS decision, and I do wish him all the best, I just refuse to treat him like a child, even if his irrational thinking demonstrates that his logic is in that mindset at present.

As for what I choose to read, I'll be the judge of that, but thanks for the tip, I'll bear it in mind next time I come across a thread of this length where the last post reads identical to the first!!!

Finally, I hope you eventually figure out George/Tiger's thinking for yourself, and that if/when you do so, might be able to offer some constructive criticism, which may set him straight.

Good luck,

Jo

*********************************************
Dear Jo,

1. Bottomline, what do you reckon GerogeSA actually wants from this forum when he first posted the thread?.. I think he is looking for an effective solution to his present "dilemma" and to a certain extent, probably also some support and encouragement from us, to help him move on in his life, having made a "bad" $350,000 investment decision.

2. As GeorgeSA has openly acknowledged and clearly knows that he has made a "bad" investment decision in the first place, I sincerely believe that he is honestly making his best efforts to try to learn how to do it right the next time round, if he has to do it again in the near future.

3. To me, GeorgeSA does not really know some of the basic game rules for successful property investing when he made his first investment decision. He is now trying to learn from this forum. Yet we have some members who are now "challenging" him to consider going into stock investing and managed funds, even though he is trying to learn about property investing.

4. Because of the varied and highly conflicting advices/opinions given by the various members in this forum, despite our own good intentions, I think GeorgeSA does not truly know who he should listen to and who not to listen in order for him to learn effectively, as he is new to the game and to all of us, though he has his own independant mind. I know that this can be a very confusing and agonising situation for a new novice investor to be caught in.

5. The fact that GeorgeSA seems to "vacillating" and "indecisive" shows his open-mindedness and willingness to learn under a very "trying" situation as everybody seems to be telling him, "trust me, follow me... my way is the way to go" albeit their totally different and diametrically opposite and conflicting opinions/advices given in good faith and with good intentions.

6. Being independant-minded himself, GeorgeSA will probably has to cautiously sieve through each and every of the advice/opinions given to see which one to learn and which one not to learn for his own case/context.

7. Yes, I do not deny my interest in GeorgeSA's case and made no apology for the detailed posts to help him as he is "keen" to make his second property investment soon;- sometimes even before he is actually ready for it yet as some of us would think. Thus, I am deliberately "slowing" him down to properly process through his first investment decision such that he truly learns from his own mistakes so that he will not repeat them again in future.

7... Perhaps, someone over in Sydney can arrange to meet him in person and explain the rules of the game for successful property investing to him in person, guide and "mentor" him along the way to a certain extent before he is ready to operate independently by himself and throw more monies into this game again.

8. I will prefer not to see GeorgeSA get "hurt" again in his next investment.

9. Perhaps, I am presently not a local Australian myself and thus not truly familiar with an average Australian thinking and upbringing in the Australina family context, I will need to further learn from you and the other members how to respond constructively and efficiently in this case, without "boring" everyone with my detailed posts, though I trust that smart members will be able to exercise their down discretion and proper judgement for their own effective time management. ( Having said this, I have intention to "patronise" GeorgeSA as if he is a kid at all. At 26, he is definitely a fully grown up adult with his own working career and life to run on his own, just like you were already a mother of a 7 year old child already then)

10. I like your "brutal" honesty and your good heart to help others, like GeorgeSA though I am not sure if I can sincerely agree with you that I am being " overly-patient" and "patronising" here.

11. Nonetheless. Thank you for your feedback.

Cheers,
Kenneth KOH

 

[Kennethkohsg]

KOH,

I must say I am somewhat bewildered by your post directed at George/Tiger, and the way you proceed to reiterate my comments, almost as though he were incapable of deciphering for himself the meaning of same.

Do you not consider this to be somewhat condescending??? After all, he may only be 26 but I do believe him capable of translating my words in the manner they were delievered/intended.

If I may offer you a word of caution, be careful in how you question this young man, such a post may instil resentment towards you (and not just for myself, as I half expect him to, after all it was I who so harshly accused him of "whinging" in the first instance). Personally, how he reacts to my post in neither here nor there for me, but I don't want to see you fall out of favour with George/Tiger.

You have shown far more empathy and interest in him than anyone else here, so please tread gently and do not jeopardise his confidence in you.

Cheers,

Jo

*******************************************
Dear Jo,

1. Thank you for your feedback and concern.

2. GeorgeSA is definitely capable of reading out from your post directly. I am merely trying to get his feedback on our 2 different approaches and on the accuracy in our different "reading"/understanding him the way he would prefer us to, so that I may better understand him myself from his perspective.

3. I hope that you are not "offended" by my approach in any way... Or am I making you feeling "uncomfortable" somewhat, unknowingly by what I am doing now? Please let me know if you are, so that I can avoid it repeating it unknowingly.

4. I accept and thank you for your concern as per your second last paragraph... but honestly speaking, how and in what way, can you please tell me. Perhaps you may want to email me separately at [email protected], so that I can learn at my own pace without further lengthening this discussion unneccessarily for the other members to read.

5. Thank you.

Cheers + Best Regards,
Kenneth KOH

 

[Kennethkohsg]

Kenneth,

At 26 I was the mother of a 7 year old boy whom I only got to see for about 40 minutes 6 days out of every 7 because I was working 3 jobs. The only full day I had with him was on Sundays, in which I tried desparately to redeem myself as a responsible quality-time giving mother.

My son is now 23, just 3 years older than George. And I would be as direct with him today (maybe even moreso) than I was with George.

)

************************************************
Hi Jo,

1. At 26, my wife and I are newly married and were then planning to purchase a new flat to set up our new family home for ourselves. I have merely just entered the adult working world for the first time, only 2 years earlier before that.

2. Thus, comparatively speaking, you have been through a lot more in life than myself, at age 26 and have probably enter the real adult world earlier at a much younger age than myself.

3. The new flat then only costed us about S$100,000 or (A$76,000) but I was already then feeling a heavy burden/responsibility on my shoulder though I was only taking up a S$68,000 (A$53,000) housing loan for the first time. Fortunately, we managed to pay off the housing loan completely and quickly within less than a 5 years period.

4. The housing loan was then a 'heavy" responsibility for us as both my wife and I have never taken any single loan before during all growing up years until after our marriage then... In that sense, I think I know what GeorgeSA is probably going through right now with his A$350,000 investment decision gone bad scenario.

5. Interestingly enough, when we subsequently purchased our second HDB flat and took a full housing loan for the S$335,000 (A$263,000 equivalent) in 1998, I did not feel any burden about the loan at all;- that was because we have since changed our own thinking and attitude towards having housing loans and were overly confidently that the value of our flat will far exceed ther loan amount over time, given our past HDB flat ownership and investing experiences.

6. So, I hope that you can now understand where I am coming from with respect to GeorgeSA's case. In my mind, I am definitely not "patronising" him, from my own perspective and given my own present life experiences.

7. For your kind update, please.

8. Thank you.

Cheers,
Kenneth KOH

 

[Monopoly]

Kenneth,

I am neither offended by your posts, nor concerned by your over zealous interest in George/Tiger's case, even though IMO it appears you have gone beyond being of any real value to this young man, except perhaps to (unitentionally) add to his confusion for the sake of satisfying your own curiousity. I don't see the benefit of your continued probing, but if you feel it helps you to understand his mindset, and it helps you both, then that's great (nothing like a win-win situation) Good luck to you both. As far as I'm concerned, I will make this my final post on this thread; replying to you purely out of courtesy.

I think you are a caring individual (too much so in fact) and I do hope George/Tiger appreciates the time you have (and continue to) devote to his plight.

Cheers,

Jo

 

[skater]

FWIW, I believe that GeorgeA is TigerGT. Have a look at the original posting, it now displays that it was posted by "TigerGT", even though at the time it was posted by "GeorgeA".

I'd like to know how to pull that trick, I don't like my user name (no I wasn't born in 1992 ) but can't figure out from digging through the menus under "usercp" how George pulled it off.

If you send a PM to Sim, he may be able to assist you in this area.

 

[tigerGT]

update

Hi Guys,

Its me georgesa... My property is now worth even less. After 18 months I have decided to take it off the market. The last offer I got was 305k. Much less than the 350k i payed for it when it was un-renovated. Anyway like some people said, its not a loss untill you sell it. It just suprises me how in December apparently there was a unusually large amount of new home buyers and loans taken out however my property still couldnt sell. I think I may have figured it out. My property is in the lower end of the market [meaning its not the best house in the best street, quite the contrary actually] and with so much choice out there people are generally much more picky and in such a stable market can afford to continue saving a little more if they dont like the cheaper houses. Also I will be making some further renovations to the house. Update the driveway, nice picket fence, add a pargola and generally make it more presentable. The problem wiht small 2br houses like mine is that when people inspect the house it takes less than 15 seconds to see the whole house and people feel as though they are paying too much for something so small. I believe its a subconcious mental thing. Anyway I am taking some further actions to amend all these concerns of mine and maybe re list it in another year. Will just have to see how the market is.

In regards to my future investment I have now together wiht my fiance saved 20% for a house in North PArramatta or North Rocks. I love the area and think we will be seeing some positive gains there in the next few years. Unlike my last purchase I have done all my homework on this one and will not be making the same mistake again.. I have not purchase it yet however if I do not get it for the price I think its worth I will be just holding off and keep looking.

I really learnt so much for this thread. I always refer to it when im unsure so thanks to all who contributed to it expecially those who helped me in the private messages. thanks

p.s feel free to comment.

 

[thefirstbruce]

Thanks for the update. Good luck on your next purchase, and don't be in a hurry....

 

[chook]

Yes - thanks for keeping us updated. I sold a 2 bedroom house in Bass Hill/Chester Hill for 200K in 1998 or 1999 and a friend of my brother bought a house there for 400K in 2002 or 2003. He also has not been able to sell and has decided to rent it out. These were both the typical post war fibro houses for the area. So with the prices coming back to 300K it just goes to show you how wildly prices in some areas swing during the cycles. I like the areas you are thinking of buying your PPOR in and I am sure you will have much better capital gain with that purchase and you will enjoy living there while you are waiting.

 

[see_change]

Hi Guys,

In regards to my future investment I have now together wiht my fiance saved 20% for a house in North PArramatta or North Rocks. I love the area and think we will be seeing some positive gains there in the next few years. Unlike my last purchase I have done all my homework on this one and will not be making the same mistake again.. I have not purchase it yet however if I do not get it for the price I think its worth I will be just holding off and keep looking.

p.s feel free to comment.

Be carefull you don't make a different mistake this time. Last time you bought at the top of the market.

What sort of info do you have to indicate the market is likely to move in the near future ?

You're not going to be able to get anywhere near cash flow neutral in those areas at the the moment , so you will be paying to hold the property , possibly for a while.

Areas further out west won't be the first to move in the next cycle , so if you do want to buy there , then I'd be waiting untill I saw some movement closer to the city . ( which is where the market moves first ).

Alternative would be to buy closer to the city , and maybe wait until you see some sign of movement there or at least a stop in the decrease.. Do a search on Handyandy's posts from the last couple of weeks , and see what he's saying about when to buy.

I'm yet to meet some one who I'd consider an experienced investor buying in Sydney at the moment.


See Change

 

[farone]

If you can hold onto the property, definatly hold onto it.
If i was in your situation, (my assumption based on your servicability, you would be in the second top or top tax bracket). DONT SELL. never sell property, if i was you I would get a 221D set up with your accountant, and get a Tax Depreciation Schedule done on your property. I have a 221D and tax depreciation scheudle set up on my properties and i am riding smoothley. Hold your proeprty through the storm,you will come up good. Just remember history repeats itself!!!