Didn't think it could get any worse...

Hi Ems, sorry to hear of your dilemma.
As people have already mentioned, I would talk to a few other Property managers and get some quotes to repair from a couple of tradies. I would also look at refinancing my ppor to pay for the repairs before I would take a $150k hit. Speak to your accountant for you best opinion there is obvious tax benefits of runnin at a loss (it's not much but it something). I have two properties here in glady my own ppor and an ip so I'm fully aware of what's going on. I'm also experiencing something very similar in Rocky with an old house. It's funny how many pms don't want to deal with it when things aren't going so good. Good luck with the direction you end up taking.

 

Hi Ems, I'm sorry to hear about your trouble. I'd like to offer you a word of encouragement and support. Sometimes, we take some steps backwards in order to go forward.

I've been having some trouble too for the last 2 years. My 'dogs' in NZ couldn't sell. And two of them need recladding, being built from Hardy's supposedly waterproof cladding. The NZ govt regulated against lending to managed apartments. I had to pay $160 thousand to the bodycorp over one year. I was a bit 'luckier' in that the rents never stopped and the yield is good.

So, to your situation. People, the Gladstone property may not be sellable in the short term. So, Ems, you have to determine for yourself if that is the case.

Selling the PPOR may not be the worst option. Rightaway, the immediate pain of mortgage repayments goes away. You can then start moving forward again. If you're not fussy, rent a cheap place and put extra money to get out of debt first. Very soon, you'll be able to start again. And if you're really lucky, the Gladstone property will sell or rent.

What you lose are transaction costs + whatever cap gain but you gain is time to refocus and recoup.

In selling, we have to consider which one will sell easiest because time is important too.

Good luck and we hope you soon have good news to report.

KY

 

Oh Ems, I really can relate to your situation as we took the, sell for a massive loss option, which really hurt us in many ways! Its such a bad situation up in Gladstone ATM and competing with the many new builds would not be helping when you need to get a tenant in. Sometimes life throws so many things at us at once that its hard to believe you will get through but you will just like I have. I firmly believe everything happens for a reason and you will find a way through this and be stronger for the experience. You will cry but that is a normal release so do it and then focus on what you can do one step at a time. Best of luck!

 

I read on a Gladstone Facebook discussion page that there is a lady with 6 (or 8) properties to offload. Was asking about a rent to buy scenario. Not sure anything more .could it be a reverse "we buy houses" situation?
Is that a good idea? .... @Terry_w do we have a reduced to clear advisory thread?

 

Thanks everyone for your views so far.

We've had another agent go in and take a look at the house. Things aren't looking good at all. He's taken lots of pics and apparently there much to be done to get it right again but he is saying we would probably get land value if sold as is. Last land value as of June 2015 was $150,000 and we paid $350,000 for it in 2010. Ouch!! There's no way we can possibly take that much of a hit
He doesn't see the market improving for 10 years plus. The worst Gladstone market he has ever seen and he was born there..

Gosh..Not good!

 

What happened? Did the house got burnt or something? Surely it cannot be that bad unless the tenant trashed it beyond comprehension? You definitely need to go there and see for yourself.

 

Yes totally Bounce. We've had so much personal stuff going on these past two years which has made us neglect the houses so it no fault but our own. ..I know worse things can happen, having gone through a heartbreak last year and then this happens. Just need to try and get through and stop feeling like a complete failure which is what I'm currently doing..

 

OK I've run some simple figures and if we hold we will be out of pocket by $20k-$25k pa.
Mortgage payments - $22k
Rates - $3k
Insurance - $2k

I believe we will need to spend $20k-$30k to be rentable again and according to an agent we'd be lucky to get $100 a week after reno. New properties are now going for $200 a week.

If we sell we will have to take a $150,000 loss.

If the market doesn't get any better in 5 years (Can't see it happening) that would be a minimum of another $100k lost. 10 years $200,000..

There's only one way out of this I believe but I'm having a real hard time convincing my hubby to take the loss. How do you overcome issues like this when one wants to do one thing and the other something else??

 

Am in Same place - will likely have to take a hit with a property that's costing us money and has no- min growth prospects for next 5 years - my hubby wants to hold - what is it with men sometimes ??getting support from other experts eg broker has helped him see my point... mainly it's the emotional stuff feeling like a failure etc but I know in our case it's just not going to be worth the hassle to hold on and I would rather take the hit so we can regain control of the situation, minimize any further losses and move forward - 10 years is a long time to carry that stress wondering every waking moment if it's going to get worse - not worth it - your mental health is more important than numbers !!!

 

Totally agree Jenny. I can't go on like this for the next 5, 10, 15 years who knows. He is always saying how I shouldn't be emotional about things and then he reacts like this. I can see his point, really I can. We will have to ask his parents to help us financially and he does feel like a failure, I do too but to hold in the hope things will improve is just burying our heads and delaying the inevitable..

I hope things improve for you both and you can go on and prosper xx

 

The good news is you can pay the rates monthly rather than in one go. Could they let the insurance lapse if there is no chance at all of getting a tenant in there. What do the others think?

 

Had a quick read - what a difficult situation. Like others have said, it is important to focus on other investments and income streams rather than letting this one beat you.

We have definitely had a few real duds (particularly shares) but have fortunately also had some successes - though it is important the order the order they come in.

It definitely does not seem worth it to spend $20K+ on renovations if the rent would only be $100 per week even after that.

Are you paying P+I on the loan ? I find to hard to put the sums together - the interest would indicate that you purchased it for something over $400K and a $150K loss would indicate it is now worth $250K - but still only gets $100 per week rent ?

It sound like a very difficult market - hope you work out a way forward.

 

I wonder if you can surrender it as an unpaid rates sale by council? I don't know but just throwing the idea out there...

 

Have you or any here looked in to "rent to buy" scenarios?

That's from the Gladstone discussion page, they have been buying since 2004 - 2014. They had some responces from people wanting more info. Could be worth looking into

 

Thank you xx

We paid $350k for it in 2010 and yes the loan is P&I. Reverted from IO just two months ago. We are paying close to $1800 a month..Outstanding loan is $319,000. One agent has valued it at $160,000 pretty much land value.

 

Wh

What is the page - Just Gladstone discussion page??

 

GOD! .... Gladstone open discussion. Just change your location to Gladstone before joining

 

How do I narrow the search? Lots and lots of religious stuff has come up

 

I've found it, thank you