Apartment investment advise

Discussion in 'Investment Strategy' started by propertyaulover, 23rd Apr, 2019.

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  1. Scott No Mates

    Scott No Mates Well-Known Member

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    It takes several years for the value of the property to bounce back to it's purchase price if it is OTP as 'profit' & 'GST' apply to new property but not to old property.
     
  2. propertyaulover

    propertyaulover Active Member

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    Thanks for letting me know! I didn't know old property does not have GST. I always think the stamp duty is too expensive to buy an old property....
     
  3. Propertunity

    Propertunity Well-Known Member

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    ... and “principle” and “principal”.
     
    TMNT and John_BridgeToBricks like this.
  4. TMNT

    TMNT Well-Known Member

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    I spent many a time in one of their offices at school!
     
  5. Trainee

    Trainee Well-Known Member

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    Are you allowed to rent to high school kids? Or is this a university?
     
  6. The Y-man

    The Y-man Moderator Staff Member

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    The OP indicates it is 2br and ok for for a 1 child family

    The Y-man
     
  7. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    No problem.

    Regarding option 3 - P&I loan.

    You have to focus on what you can control, and you can't un-buy the property, and you can't "will" the market higher.

    If you really boil it down, the problem you are trying to solve is a destruction in equity.

    Equity is the value of the property minus the debt. Since you can't increase the value of the property (without a renovation), you can reduce the debt. For every dollar of debt you pay off you are either increasing your net worth, or reducing your negative equity.

    If the property you bought isn't a dog - it was a good property bought at the wrong time which appears to be the case, you should hang on to the property, and consider recouping the loss in equity by paying off some debt.

    Conventional wisdom is to put investment debt on to IO, and this is basically the right approach subject to other factors in your financial life (how much debt you have, how many properties, what type of properties etc). Chipping away at some debt is definitely "old school", but it can make sense in times like these when you may be "stuck" with a good property that you don't want to sell, but is in negative equity.