All Topics / Help Needed! / Bought a dud

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  • Profile photo of SarahjamesconnorSarahjamesconnor
    Member
    @sarahjamesconnor
    Join Date: 2006
    Post Count: 6

    Hi All,

    I need some advice. Bought a house in central Vic. and was told the rental will be good , no problem. After 6 weeks being vacant I have been told to reduce the rent by $50.00 per week to attract a tenant. This being my first property I believed what the real estate agents had told me. Now I dont know to sell or to persist. I do believe it has potential but the extra payments I have to make, gives me a reality check.

    Any advice would be appreciated.

    Sarah

    Profile photo of L.A AussieL.A Aussie
    Member
    @l.a-aussie
    Join Date: 2006
    Post Count: 1,488

    That's a tough lesson learned; never rely on the OPINION of a real estate agent or anyone else involved in a property investment. Research your own FACTS.
    Not much you can do I'm afraid; hopefully you can carry the neg cashflow and there will be some good cap growth soon to offset it.

    Profile photo of SarahjamesconnorSarahjamesconnor
    Member
    @sarahjamesconnor
    Join Date: 2006
    Post Count: 6

    This is a warning to others, DO YOUR RESEARCH. I thought i had done enough, but clearly it wasnt and now I have to negative gear.

    This was a big learning curve.

    Thanks for your comments

    Sarah

    Profile photo of mum2fivemum2five
    Member
    @mum2five
    Join Date: 2007
    Post Count: 69

    You could also reduce the rent and sign up a tenant on short lease, it may be a bad time of year for people looking for houses. Then up the rent at a good time with new tenant.
    Just a thought, may not work, but might too. All depends if you want to run the risk of having problems again.

    Profile photo of cartescartes
    Participant
    @cartes
    Join Date: 2007
    Post Count: 4

    Are there any cheap improvements you could do to make it more attractive to potential tenants?

    Profile photo of bennidobennido
    Participant
    @bennido
    Join Date: 2004
    Post Count: 195

    All good suggestions above but if all else fails, don't be afraid to SELL …

    Part of good investing is to know when to let go, as well as when to buy …

    Tough luck mate !

    Profile photo of oneiriceroneiricer
    Member
    @oneiricer
    Join Date: 2007
    Post Count: 56

    Hi Sarah,

    If you wouldn't mind, why dont you let people know around what suburb it is? This way you could ask for opinions from people who know the area and maybe can recommend tennants or 2.

    Another thing is explain the processes that you went through prior to buying your property. Let others what happened to you so you reiterate the lessons that you've learned and educate others as well!

    What sort of research did you go through? How did you come to the conclusion of buying this? Did you just go out and buy a property?

    Profile photo of Paul DobsonPaul Dobson
    Participant
    @pauldobson
    Join Date: 2003
    Post Count: 1,196

    Hi Sarah

    There may be an alternative that will allow you to get positive cash flow from the property over the next two to three years, followed by a lump sum of captial gain.

    This involes selling the property with an Instalment Sales Contract, i.e. selling the property utilising vendor finance.

    It does mean that ultimately you will have disposed of the property but the positive cash flow and capital gain would remove your negative gearing situation.  Good luck.

    Cheers,  Paul

    Paul Dobson | Vendor Finance Institute
    http://www.vendorfinanceinstitute.com.au
    Email Me | Phone Me

    An alternative way to finance your home.

    Profile photo of SarahjamesconnorSarahjamesconnor
    Member
    @sarahjamesconnor
    Join Date: 2006
    Post Count: 6

    Hoorah,,,,,,

    I found a renter without dropping my rent, I am so relieived. Thanks everybody for your comments ans suggestions.
    It has been a learning curve.

    Sarah

    Profile photo of mum2fivemum2five
    Member
    @mum2five
    Join Date: 2007
    Post Count: 69

    Yay….well done :)

    Profile photo of project Uproject U
    Member
    @project-u
    Join Date: 2007
    Post Count: 3

    Glad you found a tenant Sara – it is a nasty time without them! Hope your property improves for you and you never know – a little improvement and maybe the rents can be increase? Hang tight – I am sure things will sort themselves out for you. Cheers, project U

    Profile photo of Kiwi-FullaKiwi-Fulla
    Member
    @kiwi-fulla
    Join Date: 2002
    Post Count: 371

    Hey Sarah ….
    Thanks for sharing that one…. I have a house that had similar issues when I bought it and when I purchased it the day before settlement the tenant bailed :o)……. anyway I have had a bit of a run with tenants on it and still have hung on to it…. as the growth has been over 27% in less than 16 months…. It has still been a fun ride and now isthe time for me to divide and conquer on this one!
    Cheers….
    Kiwi

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