在澳大利亚 The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m
As a newbie in property market it has been wonderful to read old posts and I have learned heaps. Thanks for everyone for contributing!
I know that no-one does not like to remember/talk about the worst deals / mistakes they have made over the years. But it would really help us and possibly we could avoid to making same mistakes.
So all exprienced investors please list here the worst deals and/or mistakes you have made over your career as property investor.
Two of the worst things I've done:
1. Selling any of the properties I owned . They've all gone on to double, triple and quadruple over time.
2. Selling some WPL shares I had purchased for $19ea to get enough funds to double the size of an IP I already had. At the time WPL went on to be well over $40 a share (so I would have more than doubled my money), while real estate actually fell 5%, so all I did by building was get back a little less than $ for $ on what I spent.
The only upside to point 2. was that the IP became cash flow neutral in the process (whereas it was neg geared before).
Buying an Off the Plan apartment in Southbank.
Huge running costs (compared to our other properties) without any real major upsides (rent not much higher than an existing, depreciation so-so).
My first buy was not real flash.
Bought 2007 for $295,000 renting for $260 pw.
Today it's probably only worth around $320,000 and renting for $280.
Not much room for improvement either.
It's in a prime spot and a future rezoning may turn things but at the moment it's an under performer.
Considered selling but the costs involved in buying/selling plus higher purchase cost of another property. I may as well add another few rooms or a granny flat. This would actually turn it around also.
On a positive note. If I didn't buy this I may not have started investing at all.
Propertunity said: ↑
1. Selling any of the properties I owned . They've all gone on to double, triple and quadruple over time.Click to expand...Me too, but each time it was necessary, and we are just selling another (should go unconditional today). I KNOW that when the house we are selling is worth considerably more I will think "how stupid" but I will have to try to remember back to WHY we are selling. Unfortunately, when we look back, we tend to forget the WHY and only look at "what if we had held it".
The other big mistake we made was about twelve years ago, we sold the first IP we had. It was pre-capital gains, and we needed to renovate the house we live in now. We bought it for $54K and sold for $205K tax free, and that money went into making a lovely long term PPOR for us.
We would have been better holding it but that was a choice we made with our eyes open.
Regret was that whilst one buyer tried to get approval to subdivide the corner block and was told "no" from council, the next buyer did subdivide it and that probably (at the time) cost us $100K less costs. I do believe though that we may not have been able to get approval. It seems some developers seem to be able to get some things done and Demolition Control houses off blocks that mere mortals cannot .
Anyway, we vowed never to sell without making "best use" of a block again.
However, the block we are selling right now could be developed and we did have developers look at it, but they were not prepared to pay anything like the couple who have bought it. This couple want a big yard for their young family.
We don't want the hassle of getting it DA approved, nor the hassle of developing it ourselves, and developers don't want to pay us as much as someone wanting a big block.
wylie said: ↑
I will have to try to remember back to WHY we are selling. Unfortunately, when we look back, we tend to forget the WHY and only look at "what if we had held it".Click to expand...People often on this forum express their regret at selling properties which have gone on to increase in value.
However the reallocation of capital needs to be considered here. Where was the capital allocated? What return was achieved?
Although the disposed property might go on to increase in value, the realisation of capital from that disposal enables investments which may otherwise have not been possible. Perhaps 'A' returning 8% was replaced with 'B' returning 10%. Looking at the relinquished return on 'A' only does not provide the full picture of what has occurred.
bene313 said: ↑
People often on this forum express their regret at selling properties which have gone on to increase in value.I agree. First sale proceeds went straight into our major PPOR renovation - lifestyle choice. Still, if we could have lived in our house as it was (not ideal) we would have done better by keeping the IP. However, we didn't want to live in a poxy house for (now) 13 years.
However the reallocation of capital needs to be considered here. Where was the capital allocated? What return was achieved?Click to expand...
Second was to reduce private debt. I didn't like having that debt, so again, it was a choice we made with our eyes open.
Same with this sale. When I start thinking "should have kept it" I will remember back to the choice of hubby going back to work or selling an IP. Easy choice really, so no regrets.
But I think the first "gut" reaction will be "why didn't we keep that house". As long as I remember to look back and recall the WHY then I will be a peace with myself .
Bought into a unit trust of the company i was working for(invitation only). Paid $14K for my units, left the company 18 months later when it almost folded. Got about $1K for my units when i sold them. Only saving grace was i got about $8K in dividends at the end the end of the first year.
three main regrets:
sold bhp shares at $10/ea to buy an ip that was a dud and we ended up selling years later for a loss (still is a dud even more years later).
bought a knockdown at the top of the market (2003), rebuilt, forced to sell as holding costs were sucking us under. lost $70,000
buying both of the above properties in a family trust so unable to write losses off against other income.
Thanks for everyone who has already replied. More comments are welcomed.
It has been liberating to notice that others have made not so goods deals as well. So it is not only me
My worst mistake was to invest back to sharemarket January last year. Portfolio growth 12 months NIL, but because shares negatively geared interest expenses running with some dividend income but no capital growth. If I just had realised to wait another 6 months...
Knocking back a modest, but affordible share in an 11 million commercial property ownership deal. It still stings. I rationalised it by saying I need to stick to my plan. [Icon for smacking self in side of head].
My most regret is my late partner sold our property in Upwey (5 bedroom property big block of land) for $295K in 2007 to our tenant that live in that property. The tenant told my late partner that he want to buy the house that he was renting from us for that amount of money, and my late partner agree without consulting the real estate agent. I was too busy working and 1 night i was so tired back from work and my late partner told me he had agree with that amount, but it really dawn on me after few days. I ask my late partner to refuse, but he said is not right. But that is just verbally agreement, no official agreement made. Later we found out that the property worth $370K. Mean the tenant/buyer win. That is the dumpiest things that we ever done in our live. If we would hold the property until now it will be near 600K
We haven't sold any IP's.
Maybe we hadn't been aggresive enough, but we still are doing ok.
I wish we had started a bit earlier, but even that doesn't really matter.
We had paid off our PPOR instead, so money still wasn't wasted.
Not buying a property in the late nineties in the UK is probably my worst investment decision. Prices have doubled or even tripled since then. Given I was looking at spending £70K to £100K, I could have possibly made £150,000 to £200,000 tax free.
The other bad deal was signing up to develop a game for mobile phones in 2003. I did an awful lot of work whilst being harassed by the publisher and threatened with various forms of legal action for them to recoup their costs.
I never got to see any of these costs, so I don't know what they were on about...
Anyway, I eventually walked away from the project, but got paid nothing for quite a lot of work over a 12 to 15 month period. I spoke to someone a few years later (at a job interview in Zurich for UBS) who'd had the same experience.
Aside from the loss of (potential) income, it made me wary of starting something up for some years. But it did teach me the importance of using lawyers before signing anything.