All Topics / The Treasure Chest / Should I Sell? (Richmond)

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  • Profile photo of StrikerStriker
    Participant
    @jamescameron
    Join Date: 2003
    Post Count: 33
    September 12, 2003 - 4:31 am

    I am after some advice. I bought a 2bm single fronted Victorian house last March in a inner Melbourne suburb called Richmond for $300K. It was a stupid purchase (I think) becuase not only was it 100% financed, I financed all the costs and renovations too. So all up it costed me $340K (I didn’t understand much about property at the time – but I know, No Excuse). [:(]

    I am now expreiencing a -ve cashflow of about $13K per year. Whilst I can support this, I was thinking of selling. My accountant says that although you’re down $13K per year the appreciation of the property would be far greater than $13K – so keep it!

    Any suggestions on what I should do??

    Thanks
    James

    Striker
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    Profile photo of MelanieMelanie
    Member
    @melanie
    Join Date: 2003
    Post Count: 382
    September 12, 2003 - 4:40 am

    If you want to invest in more pos cashflow property selling may be an option you’ll to take unless you have large extra funds. Have you asked around about what the projected growth is for Richmond?

    [:)]
    Mel
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    Profile photo of Stuart WemyssStuart Wemyss
    Member
    @stuart-wemyss
    Join Date: 2003
    Post Count: 598
    September 12, 2003 - 6:01 am

    I think you should consider your opportunity cost (i.e. the opportunities you are missing out by holding the property).

    Will you have any money if you sell? What could you do with that money (i.e. how much could you make)?

    I think you need to research your options.

    Your accountant’s comments are correct so long as your property definitely does appreciate as expected. It will increase your wealth but not cash flow (which is fine).

    You need to define your goals.

    Lots to think about.

    Cheers

    Stu

    Profile photo of ScreminScremin
    Member
    @scremin
    Join Date: 2003
    Post Count: 448
    September 12, 2003 - 8:20 am

    James Cameron?
    Shouldn’t you have enough money from making such hits as Terminator 1 & 2, Titanic??? Hee hee. only joking.

    Good luck james, hope you work out what you want to do soon.
    Steph.

    Success is 1% inspiration and 99% perspiration.

    Profile photo of StrikerStriker
    Participant
    @jamescameron
    Join Date: 2003
    Post Count: 33
    September 12, 2003 - 9:39 am

    Thanks Melanie & Stu. I actually will not have any extra funds after the sale. I expect to be breaking even. Maybe after a few years I can sell for more. Right now my loan is $340K & the house is probably worth $340K.
    I know, I have too much to think abut this weekend – it’s giving me a headache.

    PS. Where can you find out the growth projections for a suburb?

    JAmes

    Striker
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    Profile photo of NATS12NATS12
    Member
    @nats12
    Join Date: 2003
    Post Count: 129
    September 13, 2003 - 12:50 am

    Why don’t you get a valuation done on the property? You may be suprised at what it is valued at. That could be a start in the decision making process.

    Also, if you do sell what are you going to invest in. Maybe if you tell us what your alternative plans are we could give some advice.

    Profile photo of richmondrichmond
    Participant
    @richmond
    Join Date: 2003
    Post Count: 831
    September 13, 2003 - 12:53 am

    Howdy James,

    I don’t reckon you can go wrong with Richmond… I would have thought it will have pretty solid growth… probably nothing like the last few years, but it’s still a very attractive inner suburban area.

    Cheers
    r

    Profile photo of Elysium-MElysium-M
    Member
    @elysium-m
    Join Date: 2003
    Post Count: 259
    September 13, 2003 - 4:18 am

    Hey James,

    You need to factor in your selling costs as well. If your poroperty is worth $340k and you owe the same amount, you’re going to be down by however much the agent’s commission and other selling costs will be.

    Cheers
    M

    Profile photo of AdministratorAdministrator
    Keymaster
    @piadmin
    Join Date: 2013
    Post Count: 3,225
    September 13, 2003 - 5:31 am

    Hi James
    I’m thinking you must have a good credit rating to be in that position you’re in ? That to me is more important and useful than an property you might have invested in. Don’t like what you’ve got ? sell and try again, you have good form my friend, any institution will give you money to try again. And if this investment loses money the next investment will have a right off, that is a component of business ! So go for it and good luck ! [8D]

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