To sell or to hold that is the question!

Hi all,

We went in quite blind with our first investment and I fear we are paying for not having done our due diligence properly and would love some advice.

It is a ground floor 2x1 updated unit (one of six) in a 1960s complex in Brunswick West. We paid $320,000 for it 2 years ago and it is renting for 350 a week.

About 6 months after purchasing we realised it had some serious dampness issues. The boards keep lifting and warping and we had to clean and repaint the walls after 12 months as black mold was starting to appear. We have since replaced the boards and it is starting to happen again.

We have advised the body corporate and an engineer has advised that the front of the building (where our apartment is located) is actually below ground level and needs to be dug out and re-concreted. The body corporate is asking for quotes and then the owners have to approve the work.

What should we do? Should we get out now and look at a newer property with less issues or ride it out?

Compare what it would cost you to sell (agent's fees, possibly some CGT) and buy again (stamp duty, research effort) with the cost of the repairs.

That might answer your question. Assuming the fundamentals remain unchanged, and you bought believing it a good investment, then the cost of the repairs may be relatively small in the long term.
Thanks Rob. I think we will hang onto it for now as getting out would cost far too much. Investing 101...always have the apartment building inspected prior to purchase!
Might be too late now if the body corporate is involved. Any potentional buyer might get scared off once they read the body corporate reports.

If the body corporate is involved, and it is the structural fault of the whole building then the cost of repairs will be borne by all ,I would think. If you try to sell now then any prospective purchaser will only offer a reduced price to match what the repairs cost at best.

Perhaps you bought it a little cheaper than you would have otherwise, because the previous owner was aware of the problem.