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Your worst IP purchase

Discussion in 'General Property Chat' started by meme plecko, 23rd Jul, 2015.

  1. meme plecko

    meme plecko Well-Known Member

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    So, what was your worst IP purchase so far, what was wrong with it, how long did it take you to realise that you are not happy with that IP and what have you done with the IP lemon?

    There are some obvious mistakes - high strata fees for example. Some people would also include OTPs or properties with a pool etc. But, there must also be some not so obvious things to look for, right?

    The question is for all, clearly, but I'm particularly interested to hear from active members on this forum with many years of experience and many property transactions under the belt.
     
  2. TwoDogs

    TwoDogs Well-Known Member

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    The only property purchases I wasn't happy with are the ones I didn't buy, and there are so many.

    Sorry this will not answer your query, the point is you can do all the homework you want but the worse mistake is doing nothing. Are high strata fees an "obvious mistake" ? I would automatically assume so and so wouldn't skip a property based on that alone as it still may be a great investment (eg buying will below market price).
     
  3. Rixter

    Rixter Well-Known Member

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    No lemons over the past 16 years...still hold them all today spread over many states.
     
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  4. HUGH72

    HUGH72 Well-Known Member

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    Redbank plains 2008 peak of market, payed too much, too much available land, too many new estates. Also bad timing. Result was no capital growth for 6.5 years. Ordinary yield, this has slowly improved.
     
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  5. Ace in the Hole

    Ace in the Hole Well-Known Member Premium Member

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    Nothing bad, but worst performer was a PPOR bought in Caringbah, Sydney South at the top of the boom 2003.
    Paid 470k for a dump of a house on a main road.
    Put about 150k into it and lots of my own labour over 9 years to make it new all throughout, including a 4 car garage/shed.
    Sold it a few years ago for 710k, so only up 90k after reno costs in 9 years holding it.
    Would be worth a mil today only a few years later, but the upgrade PPOR we bought got growth so that's ok.

    Back then we didn't know much about market cycles and just wanted to get in, so we were at the mercy of the market, which wasn't kind back then like it has been in Sydney for the past few years.
     
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  6. beachgurl

    beachgurl Well-Known Member

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    2 bed house in Young, NSW. Bought the cheapest thing on the market with the attitude, it's gotta go up when the market moves. Active termites found during our ownership, turns out the pest inspector was mates with the previous owner and played down the inspection report on purchase. A few years later the back yard filled up with sewage from a burst pipe which had to be replaced.

    I'd realised it was a dog about 18 months after we bought it. Took another 5 years til hubby reluctantly agreed to sell.

    Purchased for 119k, sold for 104k. Thankfully the loss was relatively small and offset against a capital gain that year but it definitely was a crap purchase.
     
  7. Chilliblue

    Chilliblue Well-Known Member

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    Touch wood none to date.
     
  8. meme plecko

    meme plecko Well-Known Member

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    ok Rixter, with the amount of research you do, I am not surprised at this. There must be one IP though that has not performed as good as the other 15... So, where is it and why it hasn't performed as the others? :)

    Wow Ace, so the mistake really was selling too soon? Or maybe not, if you re-invested into something better.

    I remember my uncle renovating the house he bought in 1999, doing new kitchen, new bathroom, extension, only to sell at the start of Sydney 2003 boom for not much gain...
     
  9. Northy85

    Northy85 Well-Known Member

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    Townhouse I bought in Upper Coomera at the end of 2012. NRAS property, fairly high strata ($3200pa) paid a little bit too much compared to the median and it has always had some sort of problem with the building.
    It is a positive cashflow property, so that is something I suppose. But it has given me the most sleepless nights out of all my properties. I think I would loose about $30k if I sold it now based on what I'd have to pay back with depreciation and selling fees, so I'm keeping it and hopefully will gain some CG in the future.
    Boomapp.com has it has a Upper Coomera units at a DSR score of 33, so fingers crossed that transforms into some growth.
     
  10. Ace in the Hole

    Ace in the Hole Well-Known Member Premium Member

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    All is good, sold and then bought again, at a higher value, in the same market conditions.
    Actually, bought before we sold.
     
  11. Bayview

    Bayview Well-Known Member

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    All 5 of mine!!

    Nah; not really; they were all ok - but couldn't hold em due to....stuff.

    Worst one was actually the first one - Brand new 3x2 DLUG townhouse in complex of 4 - bought for $395K, expected rent was supposedly $450p/w. ;)

    Took 3 months to get a tenant and at $350p/w. :eek:

    Tenant was a pain in everyone's arse and we didn't renew here lease after 12 months. Sold it not long after for $440k. :(

    Second one was not a lot better - no CG and no rent increase at all in first 2 years.
     
  12. Rixter

    Rixter Well-Known Member

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    The least performing one, is in Sydney. Its not doubled in value as yet due to purchasing in 2010.
     
  13. jaybean

    jaybean Well-Known Member

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    Relative time frames though. Can't compare one you've held in Syd for 5 years with a Brisbane one you've had for 10!
     
  14. wombat777

    wombat777 Well-Known Member Premium Member

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    My worst one is also my best one. I've only had it 1 month.
     
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  15. sash

    sash Well-Known Member

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    Onya...Rixy baby!:)

    I have 3 lemons....but I am trying to make Lemonade...:p

     
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  16. Rixter

    Rixter Well-Known Member

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    I agree but that's not what was asked.
     
  17. Rixter

    Rixter Well-Known Member

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    Sounds like you may squeeze it in. :p
     
  18. Waldo

    Waldo Well-Known Member

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    Bought a house last year. Financially its been good to me, did a cheap reno & the property went up 25% in a flat market (plus yield is through the roof).

    However my 'mates' still give me crap about it. So no, it wasn't worth it. Not at all.
     
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  19. skyfall

    skyfall Well-Known Member

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    Have you ever sold a property?
     
  20. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Probably a unit in Coogee but really cant complain as it still did really well. Bought it for 550k and 5 years later was worth 950k so hard to say performed bad. But when compared to my other stock its probably the one lagging.