Instead of talking about your property, I am going to take a different tact. I will tell you all about my Volkswagen EOS. This was the very first brand new car that I bought for myself, just because I liked it and it was exactly what I wanted. The only other new cars we bought to this date were the Kia Rio - which was more of a necessity than a luxury. It was replacing the Lada Niva - oh I can hear you laughing and making Lada jokes, but she got us and our caravan around Australia without missing a beat. The other was the Kia Pregio - and even today I still miss the van. The amount of stuff I could get squashed into the back of that van was pretty amazing!
No, the EOS or better known in my world as the Lemon was the very first nice, luxury car that I have owned. We walked into the show room and picked out the parts I wanted and in a factory somewhere in Germany it was built and then shipped out to Australia. This was late 2007.
It is a great, fun car and when you are driving home with the roof down, the heated seats on and the stereo up loudly singing along with Kylie - well it is pretty special. None the less it is a Lemon of a car and the troubles I have had have been endless.
Along the way I have had to pay the registration and the insurance each year. There goes $1500 a year. I have had to get it serviced - the last one cost close to $1500. I have had two sets of tyres, a battery and even had to replace the stereo as the screen literally peeled off - that was another $400 just for the parts alone.
The air conditioner now probably needs to be replaced as it isn't working properly. The exhaust warning sensor came on, and it looks like that needs to be replaced and the shock absorbers also need to be replaced.
“Sure, as it is used in the business, I have received some tax benefits along the way” says Linda
The harsh reality is that the original price we paid for it was $68,000 and we have just traded it in and received $12,000! If I work out just what we have lost in the value of the car alone it is $56,000. We have owned the car now for 8.5 years and just on the value of the car we have LOST $6,588 per annum. Now if I factor in the annum registration and insurance, plus servicing, tyres etc I would put this figure at closer $8,500 per annum.
Meanwhile back in time, way back to around the same time as we bought the Lemon we also bought a unit at Keith Street, Whitfield. It is a basic but nice one-bedroom unit that is actually a loft townhouse. We bought this for $105,000. Since the day we bought it, basically it has been rented out. We may have had the odd week every so often where it was vacant between tenants.
Yes, the Council Rates are obscene with what they charge us each year. Yes, the body corporate has increased substantially due to the insurance rises - but this has been offset by lower interest rates, and higher rents. When we first bought the unit, it was bringing in $150 per week.
We have gone in and repainted it, put in new porcelain kitchen tops but reused the existing kitchen, upgraded the vanity, upgraded the white goods through out, tiled through out and put in new furniture. We have also just put in a new split system. Over the years we have put in about $10,000 into the property in upgrades.
We now rent the unit for $230 per week. There was a unit very similar on Cannon Street that just sold for $145,000. Sure, the increase in property value isn't a lot - but it is more than what we paid - unlike the Lemon which is essentially worthless.Being a property investor isn't easy, especially in these extraordinary times that we are living in right now. We all need to find a way to build up our nest egg for our old age. For us property has worked - yes, it has been a hard road and it has taken far longer than we ever anticipated.
Whenever I doubt what we are doing I just remember "Being old is sucky but being old and poor is even suckier".
In a roundabout way, I am trying to say that if you are going to invest in property you need to look after it along the way, as it will continue to bring in you in income and appreciate in value, unlike a car!!