Gary and Annette Moss reflect on how they bought a dog investment a few years back, and how something that seemed right at the time has come back to hurt them
Gary and Annette Moss have learnt the importance of property research the hard way. The Sydney-based couple purchased an apartment in the Sunshine Coast’s Twin Waters in 2010 and say they wish they had examined property data more closely before making the purchase.
Gary is quick to point out why they feel frustrated. “At the moment there is so much stock on the market in the area that properties are taking really, really long to sell,” he says. “Those that do are selling for much less and there are a lot of people that would be making a capital loss if they were to sell now. It’s not a good position to be in. Our investment property there remains a big hole in which we pour mortgage payments into each month.”
Where it went wrong
Gary says they were originally attracted to the area because they thought it would be a great place to retire. They examined prices within the area and average rentals, but that was about as far as they went. “We did enough research to realise that as far as market value was concerned, the purchase price was good. What we didn’t realise was that there was an oversupply of apartments in the area.”
The property, purchased for $625,000 and rented as a holiday home, now struggles to remain tenanted. Gary adds that it hasn’t helped that floods in Queensland over 2010 and 2011 stopped many tourists vacationing in the area.
“We’re now in a position where we have to start thinking of some ways to make our property stand out from the crowd, which is proving difficult. It’s pointless renting it out over a long-term basis, because the mortgage payments are too expensive. If we sell, the price won’t be good. We could hold onto it for a couple of years and try to get some more capital gain out of it, but I don’t imagine that being a very good long term strategy.”
Atoning for mistakes
Part of the niggling feeling of regret that Annette and Gary feel toward their Twin Waters purchase is that they’ve made much better buying decisions since then. They decided they needed some expert advice on how to proceed next and after consulting investment adviser Kevin Lee of Smart Property Adviser, they’ve completely overhauled their approach.
“We now rely heavily on being able to leverage off of research. Kevin made us realise that we should be going for positively geared properties and that the best way to find them would be to look for houses that the average person could afford to rent. We now have two investments in Western Sydney and are very happy with them.”
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