January 31, 2022

#138: Listener questions - I bought a dud property, can we recover? - Why rushing into an investment can mask other problems, is lack of cla

34 minutes

https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode Dave, Cate and Pete take you through: 1. A question from our listener In this week's episode we dive into a question received from one of our listeners who was concerned that he may have made an investment mistake and purchased the wrong property. The key question as posed by the listener was "is this a situation we can even recover from?". In this interesting and insightful case study, the trio unpack the listener's scenario and discuss possible options for his next steps. 2. Analysing the investment The trio apply a critical eye to the property in question and they also assess the other properties owned by the listener to determine the future growth prospects, projected outgoings and anticipated rental yield. 3. Why did the property seem like a good investment? The bells and whistles attached to a property may make it appear to be a good investment that will likely attract tenants. But often these shiny elements can catch your eye and blind you to what's important, like the land to asset ratio, which is the primary driver of capital growth. These bells and whistles can also be a drainer on your cash flow and yield in the long-term. The trio discuss some clever marketing tricks that can deceive investors into going down the wrong path. 4. Peeling back the onion and working on long-term goals Where many investors trip on their property portfolio journey, is failing to think about their lifestyle goals and long-term home. For most people, getting into the dream home is one of the big rocks that you want to fit in the jar, and this may mean selling one or a number of investment properties to achieve this goal. The trio discuss planning for your home and how this fits into your portfolio strategy, including retirement planning. 5. Running the numbers A key component of any investment decision, whether it's to buy or sell, is to get a clear idea on the different paths you can take and whether you can make that step now. This involves doing the maths and modelling scenarios to make an informed decision. The trio crunch the numbers in this listener scenario - can they get into their long-term home now? Or soon? 6. Making peace with selling at a loss Many property owners will need to consider selling a property, whether due to upgrading, offloading a poor performing asset or as part of a debt retirement strategy. With the large in and out costs associated with property transactions, this decision can be an emotional challenge, particularly where a property is sold at a loss. The decision to sell a property should be a serious consideration, if it makes financial sense when considering your long-term goals and opportunity cost. Visit the show notes - https://propertyplanning.com.au/listener-questions-i-bought-a-dud-property-can-we-recover-ep-138/

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