exit strategy on loosing IP

Hey all,

I wanted to hear some opinion about exit strategies from a bad investment.
The property is a unit that i held for ~ 5 years now. always on P&I. recently the value droped significantly, ~ 13%, so if i sell now, i dont even get my 20% deposit back.
the unit is always tenanted, rent dropped of course, and currently its ~ 5k in the red, after all expenses, but before tax (so neutral after all deduction).

assuming that i only expect a marginal growth in price (but no further decline), and a 50/52 weeks occupancy, and there is no debt recycling option - is it better to sell, cope loss or hold?

 

Suburb, state, block size? Was it new when purchased?

If you sold, you probably wont get any net proceeds. What will you do with the freed up borrowing capacity? Whats your view on the long term growth of the property?

 

We wrote a blog on this topic, which you may find useful:

7 Questions to ask when you’re down the road with a POOR investment (lesson)!

 

cool thank you!

 

its not new, capital city, unit. 2 bed 2 bath. if sold, i was thinking to purchase an alternative IP. so reinvest basically.

 

I have one in Canberra. I understand. I think now things are on the up so maybe ride the upswing after the long flatline then sell up. I will continue to hold as I have nothing better to do with my money currently.

 

I am newbie myself but i think even if you sell at same buying price, you'd be hit with some CGT due to deductions claimed earlier. Keep it in your calculations if you decide to sell now