No show at home inspection - Even with price reduction

Thanks.

I'm starting to feel better about things! And more positive.

I'm looking at this now not from the vantage point of what I'm losing but from what I'm gaining. I'll come away with a bit of cash and the most important thing my sanity. I'll still be able to ride the eventual Perth wave when it gets here with my 2 Perth properties. In the meantime I don't mind saving for a couple of years before investing again.

And yeah your right since I've been investing from 2008 I learnt a hell of a lot. Ran into trouble in 2011 when IR went up and the gfc hit! I had to go back to live with mum and dad. Then I bought a villa at the wrong time in Perths market it turned out and this is where I learned you have to take into account rents. Rents rise but yes they also fall. Rents in Perth crashed a few years ago. Yeah so I won't be making those mistakes again. You have to make sure you can cover for when IR rise and rents fall. I was getting $340 PW at one stage for my 1 bed and was sitting pretty but then it went down and down and now it's renting for $190PW. My villa started out renting for $400 PW and now just $290 PW.

So many more things I've learnt over the years. It's been quite an education. And that's the way you learn sometimes, unfortunately, by making mistakes. So even though I haven't been as successful as lots of others on the forum I feel I'm in a position to offer advice on some topics I've had experience in. Lots of things I've learned in the PM side of things too.

Ok so all is not lost. I'm 45 and have always been ok working till into my 60's so I've still got plenty of time to recover from this and invest. Still a couple of more cycles

 

Yeah I knew I was wrong and off track for a while but I was hoping that Perth would correct itself. And that I'd be able to hang on long enough to ride out this difficult wave. But in hindsight I would've been better off selling 2 years ago. You live and you learn. It's hard to crystal ball though.

 

Yeah this is what I'm thinking too!

 

Yes bingo!! This is what I learned.

Most important is to time it right. Buy on the rise. I'll be timing it right next time around!

Cash incentive!? Sounds interesting! I'd love to hear more! That's out of the box. Cool.

Yeah I don't mind offering incentives. I've been known to offer free weeks rent to tenants. I offered a cash incentive if my tenant is good, keeps my place tidy and cooperates. So yeah I'm up for any ideas/suggestions. Thanks for the idea. You've planted a seed!

 

Not sure how it would work from a legal point of view , but the state government gives them a grant to buy new homes only ,and is designed to keep the construction industry ticking along.
Because of that many established homes at the lower end struggle to sell as the builders have more room to lower their prices,and stay just below the price of established homes.
It it not possible to offer a cash incentive ,instead of a slight price decrease during the offer and acceptance process.
But would need to get the attention of FHB first.

 

I'm having 2nd thoughts about this now. It might look like I'm coming across as too desperate.

I think if I just price it right it will be sold.

 

Disagree with this.

If you buy in Sydney today you are buying a peak, this would be a mistake.

Buying in Perth in 2013-14 was a brilliant time because the market was rising.

It all comes down to timing the market, when you buy? If you get this wrong be prepared to go backwards.

 

Perth is a buyers market it is critical to get the pricing correct from the start, if you keep dropping price you will spook the market, the longer it stays on the market the harder it will be to sell.

Properties are selling in Perth but its price sensitive.

Another question for you is the unit floor plan less than 50 sqm?

 

Keep in mind having 'x many' assets to your name isn't necessarily a good goal; you want to aim to have GOOD assets. If you own an apartment, or an asset in an area where there are multiple similar assets on offer (fringe suburbs being a good example), or both, you may be competing with too many identical assets.

A single high-quality house in a popular, established area in a good market (e.g. one that hasn't seen an explosion of recent price growth) can be far more valuable than two or more poor quality assets (like units in an oversupplied region). Perth is probably closer to recovery than cities only just coming down off an extended boom, but even as it recovers oversupplied assets may continue to do poorly (so if you buy in Perth again consider the asset type and above all your asset competition carefully. Good family homes will always appeal). You also need to be thinking long term, and shouldn't necessarily restrict yourself to one city, or even one asset class.

Remember it's ok to sell and consolidate. It's also ok to take a loss if an asset isn't performing, as long as you have a plan going forward regarding how you plan to diversify. Perhaps consider looking into a share portfolio, and/or consolidating into a single good asset. Investors make mistakes, but good investors respond to them pragmatically, and by taking a long hard look at the options. If you do decide to drop your price and push forward with selling, you'd probably feel more positive if you sit down and make a good plan as to where you'll invest next. Never wallow in it. Some assets just don't perform, it happens.

 

What are your interest rates looking like at the moment?

Without needing to refinance, you may be able to get your rates down which is an immediate cash flow boost. It's probably one of the easiest things to do in your situation.

 

Its been on the market for just 1 month so far.

Too late, I dropped it again just earlier this morning. I told my RE agent if no-one puts an offer in the next 2 weeks then i'm taking it off the market.

I thought I had priced it right at the beginning judging by com-parables but got it wrong. I realised after 2 weeks I better reduce the asking. Its been 4 weeks now and the final drop in price as I wont reduce anymore, I wont be giving away the property.

Its 48 sqm.

 

I'm speaking with my mortgage broker. I'm going to try to get better rates. I'm going to fix my villa loan for 3 years too.

 

Yeah i'll regroup and save for a few years and then go from there.

yeah, I'm looking at it from the point of view not what I'm losing, but what I'm gaining! The cash I'll make from selling wasn't even mine to begin with. Its mum and dads deposit money they gave me as a gift. So I'm very fortunate, very grateful to be in the position i'm in.

 

Size may be issue for buyers?? Finance

 

I dunno.

I've been trying to think outside the box. Different ideas.

One idea could be rent to buy but I dont know much about this and it could be too risky. This helps fhb's get into the market if they dont have a big enough deposit.

I think if I end up taking it off the market and were to get myself into financial pressure I could accept the help from mum for a loan and when it sells down the track in a year or so I can pay her back and with interest. Its nice to know i've got some support there if I need it too. But I'll think positively that I'll be able to afford to hold it for a while if I need to.

 

3 assets is great but it’s not all about the number of assets. It’s more about total value of assets. Those 3 assets also come with 3 lots of rates, 3 lots of insurances etc.

As many have said it may be time to cut your losses and move on. Learn from it and continue on your investment journey.

Hope it all goes well

 

Something you might not have considered is the Spring market. I don't know your area but I do know that some areas tend to pick up a bit in Spring. You would need to talk to your agent about whether this applies to you. So, instead of waiting 12 months to sell, you may only need to wait until Spring.

 

I distincly remeebr your name in a few huge threads about your situation on ss

 

It's an annual event!!

 

Sorry to hear your conundrum. But here is something that may help ...if you are making a 8k loss per annum offset against a PAYG income...did you know you can make a variation to your income to factor that loss into your montly income. It can be done by your accountant.

That way they take less take out based on your estimated loss. That will help you with cash flow and also assist you with borrowing less from tour mum.

Perhaps one of the accountants can comment on the exact term of this option