Any point in holding on ?

True. But OP didn't buy in The Druitt. Maybe regretfully, which I read as the gist of the thread. Regretting a poor growth purchase. Druitt kind of growth just ain't going to happen in Redbank. Not in the same 4 year span anyway.

 

You asked the question how would it compare to a property in Sydney? I pulled stats for an outlying suburb. You could probably pull similar for Seven Hills, Padstow, Penrith or Asquith and get similar growth.

Different markets move at different times and Qld is behind the times.

 

Correct.

 

Ohh.
I thought you were making the argument from the other side which is why I was asking for clarification on the point of your first comment. Ok got it now.

 

And if the choice was to cut n run and use funds for say debt reduction rather than invest elsewhere ? Would you still sell ? My dilemma is I won't have enough to invest elsewhere (in property anyway)

 

I would consider investing in a good index fund or paying down existing debt or a combination.

 

As you said it'll be a break even if you're lucky, so if I was you and it's a break even then I probably would keep holding it and keep building up the equity. At the end of the day if an IP is feeding itself without you having to put money into it then that's a good position to be in as you can just wait for the wave to arrive. But eventually it's up to you, if you think this is not a good performing IP in CG then it makes sense for you to cut the loss and move on.

Ultimately it comes down to the goal that you're trying to achieve. Why are you investing and what was your original plan for this property - was this IP bought with the idea that it'll be a cashflow player or a CG player in your overall property portfolio?

Cheers,
David

 

Thx David ...To be honest originally planned as a simple buy and hold that would largely pay itself off over time (as it's only slightly negative cash flow with P&I repayments) and provide a retirement income ... so a conservative plan but the risk of declines due to oversupply and/or a general market decline due to IR hikes etc worries me a bit ...

 

Then shares aren't for you either

 

Hi Jenny, why on P and I for this property?

Can you go back to IO?

 

Probably ...only had a 3 year IO period - didn't have the best broker at the time and being new to it all I didn't question it ...can maybe extend for another two years but need a full finance app because in LMI territory otherwise to shift to another bank will cost me $8k to refinance at 5 years IO which doesn't seem worth it with such low CG wish I knew all this beforehand but that's the learning process I guess ..I actually think property investment is far more complicated and risky than most people in this forum make out .... I'm willing to bet more people get burnt than actually make any worthwhile return

 

Fair point but easier and cheaper to get out of dud shares than dud property

 

For someone to make money someone has to lose money.

 

Well... Not true.

 

Buy a house for x, sell in 5 years for y and next year it doubles, someone lost.

Not directly someone has to lose money physically but the opportunity cost.

Not everyone will make money from property because if it was that easy everyone would be doing it.

Even investors of the years lost money, but someone also made money.

 

You can not count opportunity cost as a loss because then everyone in the world is constantly making a loss on a myriad of different things that they missed out on by not investing.

A similar example to yours:

If a property appreciates at 7% growth for 15 years, then is sold, then the next person who bought it has it appreciate at 7% growth for the next 15 years, then sells it.

By your logic, the first person (who made a great profit), has actually made a loss because they missed out on the next 15 years of profits. Same for the next person who eventually sold it.

Similarly, if someone has no money to invest, then by your example they have made a loss via missed opportunity.

No making a gain (or not making more gains) is not the same as making a loss.

 

This is the predicament I am in.

We are contemplating selling our acreage PPOR. Do we sell it now or wait for 12 months when Brisbane prices are 20% higher?

To me, that 20% is a big loss IF it does happen!!!

 

Hi Jenny,
Why not just stick to yr original plan ?All that effort you put into getting the place ,just carry it and let it pay itself off on its own time.If you keep it in good condition you wont have trouble getting tenants .
At the same time save up and buy another property in a better situation with yr new knowledge learned from this one .then repeat again and again

 

i wouldnt bother, the area is built on clay and sunken mine shafts and the competition with brand new allotments with builder warranty, built to spec of first home buyers will be too much of a lure (and drag on improved values).

in saying that, my parents bought in '89 for $57K and sold the property last year for $325K - 3/1/1 on 760m2.

having grown up in the area in the 90's (before it became a slum), i honestly don't think you're going to capture the growth you're seeking due to the above plus springfield lakes/augustine heights and all the other smaller developments built between redbank plains & bellbird park.

 

P&I is not that bad.At least yr getting ahead on the mortgage!I reckon you need to just encourage yrself that you have made a start and keep going .You are in a much better position than many investors I know starting out