Bought a lemon!? What to do now...

Hi all

First time posting, just found this site not too long ago (I wished I did!). Looking for some pearl of wisdom and your wise words here...

I think I've made a rookie mistake and purchased a lemon property recently in inner suburb of Melbourne...It is meant to be PPOR and was going to use it as the stepping stone for the next acquisition (be it upgrade of PPOR and turning this to an IP.... or just buy another IP).

But after much analysis now, the property presents very little 'upside' (3.7% rental yield).. not too mention, it's next to a busy road and has a heritage overlay.

What is the best move from here? Live in it for a couple of years hoping that equity will be available to fund the next purchase and turn this into an IP. OR if it doesn't perform in 3-5 years time, sell the lemon alltogether?


Appreciate your feedbacks/inputs... Thanks

 

Make lemonade.

 

Is it a new or existing property ?
Which suburbs if you don't mind to share ?

 

Are you able to perform any cosmetic internal reno to increase value?

 

It may not necessarily be a lemon. If you post suburb, unit/townhouse/house and some numbers (purchase price, potential rental return etc.), age of the property, the forum may be able to provide better advise.

 

Just go live in it as per your intention. Won't need to worry about low yields then.

 

Why is the herritage overlay a problem?

 

Sounds like your first taste of buyer's remorse. I agree - live in it. You will make it nice while you're there, increase desirability of the area, become familiar with its strengths and drawbacks and work out the best renos to do that will fit in with the heritage stuff. By the time you move out, the yield wiĺ be much better.
Property takes time and effort. You can't just jump around like a frog. Wait a while so that it gives you something back.
If you still want to sell and still think it's a lemon, you might want to wait for the next boom to sell.

 

It is an existing property but newly renovated interior. I'll PM the address for those who are interested to pitch in their thoughts... The potential rental return is around 3.7-3.8%. But very limited history around the area (esp. the houses and units covered by the overlay).

 

Suburb?

 

I have felt like this about just about everywhere I have ever lived - buyers remorse as WattleIdo says. I dont know why humans are wired to think this way

 

Airbnb, charming inner Melbourne suburb in convenient location. Sounds great!

 

Though I think the original poster was hinting that they didn't want to live there because of the main road aspect of the property. I can relate to that having made the mistake of living on a busy-ish road once - never again.

 

I bought a lemon property in 2003. Picked it up at the peak of the market. Poor yields, very minimal cg for many years.

Now it's worth 2.5 times that amount and is positively geared by $20k pa

(I did put a granny flat on it to make it positively geared).

You just need to make the best of a situation. Make some lemonade... Or peg the lemon at some people you don't like

 

Whilst a busy road and heritage overlay might not be ideal to many people... There are a lot of people that are attracted to heritage features and are willing to accept the busy road location. I agree that it is not necessarily a lemon.

 

Moonee Ponds. I hope it is truly just a case of buyer's remorse!

 

Pros: Moonee Ponds is close the CBD, good transport (train and trams), newly renovated property so nice to live in.
Cons: Low rental yield, main road traffic.
My advice would be to live in it for a while and see if you like the area. The main road traffic /noise may not bother you. If you work during the day you will most likely miss the noise. Heritage houses are nice in my opinion - they don't make them these days like they used to.

 

Some of that noise can be mitigated, get double glazing if you're going to live there, or some heavier curtains. Makes quite a difference with double glazing, especially if you're on a tram line too.

 

Well Melb and Sydney have been all over the news for ages as booming, so buying anything decent is probably going to give those yields, as others say, if it is meant to be your home, just live in it and see how it does.