If you think you bought an underperforming property, you need to know exactly how to know if you bought a lemon at first?
"What constitutes a lemon? There are several factors that could affect a property's ability to perform well in terms of cash flow and / or capital growth, "says Miriam Sandkuhler, purchasing agent and CEO of Property Mavens.
"If property costs you to keep it through a negative gear and your capital growth is low or negative, you may have to question the benefits of keeping it."
A number of investment fundamentals can negatively impact your property's ability to appreciate value (see box). If your property suffers one, then you should carefully consider what you can do to repair or fix it. the question, rather than what should be a last resort: the sale.
However, if you encounter a number of these problems, you need to ask yourself the following question: could your money and borrowing ability be better invested elsewhere, instead of hoping that you? 39, an underperforming property will improve?
"Reasons to consider selling include the lack of multiple drivers of growth, such as employment opportunities, infrastructure, and population growth. Ideally, you want them to guarantee that you have bought in the right place, since a single growth factor in isolation is not enough to support continued growth over the long term, "said Sandkuhler.
If you are considering divesting the property, she recommends that you seek the advice of your accountant regarding the implications of the sale of the property, particularly if you realize a capital gain or loss.
To learn more about how to bounce back from a real estate mistake, including a number of proven strategies to regain control of the situation, read the full feature article from the May issue. 2019 from Your Investment Property magazine.
Available at Coles news agencies and supermarkets from April 11 to May 9 or download the magazine now.
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