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

Discussion in 'General Property Chat' started by melbz, 8th Sep, 2015.

  1. melbz

    melbz Member

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    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
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    Make lemonade.
     
    eng, Mardi McKenzie, JDP1 and 9 others like this.
  3. Tekoz

    Tekoz Well-Known Member

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    Is it a new or existing property ?
    Which suburbs if you don't mind to share ?
     
  4. trinity168

    trinity168 Well-Known Member

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

    srirang Well-Known Member

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    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.
     
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  6. S.T

    S.T Well-Known Member

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

    Esel Well-Known Member

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    Why is the herritage overlay a problem?
     
  8. WattleIdo

    WattleIdo renovating Premium Member

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    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.
     
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  9. melbz

    melbz Member

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    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).
     
  10. jaybean

    jaybean Well-Known Member

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    Suburb?
     
  11. Heinz57

    Heinz57 Well-Known Member

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    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
     
  12. twobobsworth

    twobobsworth Well-Known Member

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

    Ben Chifley Well-Known Member

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    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.
     
  14. neK

    neK Well-Known Member

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    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 :p
     
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  15. legallyblonde

    legallyblonde Well-Known Member

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    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.
     
  16. melbz

    melbz Member

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

    eastsider Member

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    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.
     
  18. S.T

    S.T Well-Known Member

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    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.
     
  19. dabbler

    dabbler Well-Known Member

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    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.
     
  20. The Y-man

    The Y-man Moderator Staff Member

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    @melbz

    Uh yes - buyer's remorse. Renovated Lemons don't have a heritage overlay - the apartments in Travancore on the other hand.....

    If you're on Mt Alex rd or Maribyrnong rd, transport is fantastic. And funny thing is you are closer in than Essendon to town.

    The Y-man