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

Why did you buy it in the first place?

If it was for a PPoR, then stop looking at it as an IP and end the turmoil.

 

My first PPOR (now a healthy IP) was right on a main road, worst of all a downhill section where trucks loved to use compression braking. The bedroom facing the road was impossible to sleep in, not just due to the noise but also the extreme cold (felt like a walk-in fridge.)

Added magnetite secondary glazing for a few thousand bucks and it made a huge difference. You could see the traffic but could barely hear it, and the temperature was much more stable. No more morning condensation on the windows either

Make do with it for now, and worry about yields later when it's time to upgrade.

 

Also, common sense approach to cover for all possibilities (sell, PPOR, IP) - IO with offset.

 

Take a step back and look at the bigger picture.

If it won’t hold you back from acquiring more property, it might make sense to hang on (for now).

If it’s an obstacle to moving forward, consider selling by weighing up the opportunity cost of holding it.

 

great suburb,

low yields? so is basically all of metro melb,

if your going to live in it, then yield wont matter,

doesnt sound too bad to me, unless you overpaid

 

agreed. Low yields alone don't make a lemon. In that spot it would have to be overpriced or structural problems for me to consider it a lemon.

 

Thanks all. Heeding your recommendations and will hang on to it. Will probably treat as an IP once I upgrade and move to the next PPOR.

 

I can't really make any comment based on the information you've provided, other than a couple of generalisations which others have already made.

Moonie Ponds is a well located suburb, there's a lot going for it. Over time it's enjoyed quite reasonable growth and there's every reason to believe that this will continue in the medium and long term.

For an inner city suburb of Melbourne, 3.7% is quite a good rental yield. Just because it's not cash flow positive doesn't make it a bad investment. There is a lot on focus cash flow on this forum, but here's a secret - cash flow is the vehicle that lets you hold the property; it's the capital growth the makes you wealthy.

My first IP was in Brunswick, bought in 2000. By todays value it would have a 2.5% rental yield. Its value has also increased almost 400% in 15 years and puts a lot of cash into my pocket given that the rent has also increased significantly in that time. Property (and any other investment) is a long term prospect.

I would suggest that buying now, you may have bought close to the peak of the market. This property may even drop in value, but it could increase as well. If you hold onto it for the next 10 years, I don't think you'll regret your purchase decision.

 

Today's lemon is tomorrow's lemonade.

Make it your PPOR as intended and re-assess in a few years.

 

Be thankful it aint in southbank /Docklands... They will truly see no cg and likely rental compression.

 

@melbz Are you in the same street as Dame Edna?