Forums / Property Investing / Help Needed! / To Sell or not sell bad investment in Inner Brisbane Suburb?

Viewing 9 posts - 1 through 9 (of 9 total)
  • Profile photo of craig123craig123
    Participant
    @craig123
    Join Date: 2012
    Post Count: 27

    Hi all
    Need help!! Please

    I bought a 1 bed, 1 bath, 1 carpark in Brisbane Fortitude Valley in 2010.
    Currently it would sell for the same price i paid for it in 2010.
    Should i just cut my losses and put the $$$ into my PPOR offset?
    I would basically get my deposit back minus real estate fee.

    I/O loan, always tenanted but a high turnover.

    Thanks guys.

    Profile photo of TheNewGuyTheNewGuy
    Participant
    @thenewguy
    Join Date: 2014
    Post Count: 151

    Not enough info. My personal opinion is that Brisbane is improving overall so you’ve seen the worst of it. Whether or not your particular place will go up,I’m not sure because you haven’t given enough info. But you’d expect the valley to be ok since it’s pretty much the city.

    Profile photo of craig123craig123
    Participant
    @craig123
    Join Date: 2012
    Post Count: 27

    Yeah it close to city but with the huge amount of apartments being built there will be an oversupply for the next few years right?

    The apartment is a well known complex for people who know the valley.

    I dont know what info to give.

    I had 30k in 2010 and i thought buying an apartment would be a good idea. Its a great location.

    I would have been better putting it into the bank i think.

    I just dont know if i should get rid of it and use the $$ left over to pay off my own mortgage.

    Appreciate the reply. Thanks

    Apartment in 2010 paid 290k in a nice huge complex in the valley. I/O loan tenanted at 380 a week but approx 80-90 per week is body corp and $30ish a week is agent fees.
    Interest rate current 5% approx.

    Borrowed approx 260k

    Its negative geared, Just..

    Thanks

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    You need your crystal ball – if you think it won’t grow by at least what it is costing you then it may be work selling.
    Even if you think it will grown more you have to weigh up the opportunity cost of it tying up capital and/or preventing you investing elsewhere.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of CodieCodie
    Participant
    @codie
    Join Date: 2016
    Post Count: 13

    A friend of mine has just sold his Unit in new farm, paid about the same as you around the same time, in an older 8 unit complex, however he was able to make changes and renovate his and ended up just settling for $405k. I’m not sure what state yours is in or if you can renovate at all, but I know Unit prices seem to be flat if not slightly dropping as people are aware of the over supply in the pipeline.

    Profile photo of craig123craig123
    Participant
    @craig123
    Join Date: 2012
    Post Count: 27

    A crystal ball is what i need..

    Thanks.

    Profile photo of Alistair PerryAlistair Perry
    Participant
    @aperry
    Join Date: 2004
    Post Count: 891

    Hi Craig,

    If you don’t think there will be much growth in the property then its really a no brainer, sell it. Nobody can be certain as to what will happen with property prices, as long as you make an informed decision you should be content that it is the best decision you could have made at the time, whatever happens.

    I’ve always thought that the decision to sell a loss making or neutral property should be easier than the decision to sell one that is in the money as you don’t have the issue of generating a tax liability. If you have an on going, non deductible debt then you will get a certain and relatively high return by reducing that loan.

    Regards

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,376

    Hi Craig,

    An email hit my inbox today – in it, it had this section re units being built currently:-

    In 2011, we added 12,000 units to the market in Sydney, Melbourne and Brisbane. In 2017, we’ll be bringing 52,920 to market.
    Between 2007 and 2011 we built less than 60,000 units. Between 2012 and 2017, we’ll build close to 200,000.

    This was from Jon Giann – and, for those interested, the whole article is here:-
    http://knowledgesource.com.au/dont-buy-apartments-from-clive/#fromemail

    In relation to Brisbane particularly, there were just 18,000 units built from 2007 to 2014 inclusively. 2015 sees 6000, 2016 is 7000, and 2017 is 8000 – just for Brisbane. Glut anyone?

    Well, just to add a bit of balance, I have also read recently that many overseas investors tend to “landbank” units – i.e. they buy them, but never rent them out !! These are simply a storehouse for their equity (a “Fort Knox” if you will) so just the building of them will have ZERO impact on rental markets.

    The big question is then – just how many being built are for that overseas market? Could this “landbanking” mob be purchasing as many as 50% of the total units? I don’t know, but it begs a bit more research, eh? It also shows that mere statistics never do show the whole story, and can even sway a decision in quite the wrong direction.

    Craig, I have personally stayed away from units (or any new houses/duplexes either) thus I have little direct knowledge to impart. My niche was in buy/reno/hold or sell. Fortunately, we have a number of members who have a wealth of information across many facets. Use what has been shared already to help you to arrive at a conclusion. Or, if you need more info, just ask more specific questions and let’s see where that leads.

    Benny

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    You could look to get a Bank Valuation on the property and then look to sell it on No Deposit to an owner occupier / investor.

    We have just listed a number of properties in Portside, Hamilton on a similar basis.

    Might not get all of your funds back immediately but over a period of time charging a rate of interest on the balance.

    Especially if the sale price is higher than it would be thru a standard real estate agent.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

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