investor said:
I don't understand why there is so much debate about this. His answer is simple.
If he can afford to HOLD then he should HOLD.(full stop)
He bought at the peak, that was maybe the wrong thing to do maybe not.
But now, what benefit is there if he sells for 340K ?
So he can buy it back next year for 340K ?
There is no reason to sell and take a loss now.
If you had bought Telstra shares for $5.10 4 weeks ago and watched them drop to $4.70 now will you panic and sell at $4.70 just because the price dropped ?
and I must say his house is a safer investment than Telstra will ever be.
I can't beleive what I'm reading here. You guys are actually advising him to take a loss and sell.
12 months ago if this issue was raised all of you would have advised him to HOLD FOREVER. I wonder what has changed since then.
Regards
Investor
Well, hooray!
Well said, Investor!
As I have commented before about property investing, if it was easy everybody would be doing it. It's not and they aren't.
I have been carrying an empty house for three years now, and believe me that means finding heaps of money at regular intervals. I wasted lots of money on the property in the first six months instead of just renting it as I bought it and coming back to it later.
I could have sold it a couple of times - at a whacking loss - but when I look back over the years I have hated selling anything, have never got 'real' value when I have sold, and have regretted it later.
So I have just plugged away, finding the money when I can, capitalising the debt when I can't, and now it looks as if there is some light at the end of the tunnel but, of course, that could just be the headlights of the train!
George, with all due respect, don't spend any more on the property. It looks to be in good condition, it has a tenant, just leave it be. It will have it's day in the sun but the more you fret the more stress and anguish you experience.
The tenants rent the whole property. I once got a great tenant who had lived somewhere else for three years, and just up and left when the owner wanted to start fiddling about with the arrangements, wanting surveyors to have access and to start preparing plans for subdivision etc They left me, too, when I painted the house. All they wanted was a quiet place to live and to be left alone.
If you are obliged to spend $50,000 on your wedding, so be it, but what is the point in disturbing a good tenant, trying to sell a property for less than you paid for it, and paying for the loss for years to come?
Why not think about your whole situation - life is not lived in compartments - and see where you can manage the risk a bit better. Have your gala wedding, but perhaps have the round-the-world honeymoon a little later?
Have the guest bring their own sugar almonds? Hire smaller limousines?
Have you considered reviewing your mortgage arrangements? Is there any equity so you could increase your borrowings and capitalise the debt for a while? What about the PAYG variation as mentioned before - that would moderate the cash flow rather than waiting a year for a tax refund.
In twenty years time you will be very glad you kept this property. Having property is, in many ways, like having children. They are very costly and can cause us many sleepless nights, but the benefits far outweigh the sacrifices we make during the early years.
You have shown yourself to be a young man of courage in buying the property in the first place. Don't be deterred by this temporary set-back, and make sure you buy another one as soon as you can.
Best wishes
Kristine