What to do with apartment?
Question from Charms updated on 31st August 2012:
We have owed an apartment for approximately seven years and it has devalued by half the purchase price. Our rent is 30% down from when we bought it. Do we just hold onto it and hope for the best or do we cut our losses and invest in something else and hope to recover our money that way? What do we do with our apartment?
Our expert Kris Pedersen responded:
Very difficult to say without knowing where the apartment is and why it has devalued so far and had the rent drop. Is it because of leaky building issues (or suspected issues) so no one will go near it? If so you need to see what the process is going to be to get it remedied and if it is worth staying in or not. Is it because it is based in a smaller town where there is oversupply in both the sales and rental side which is driving both prices down? If so you need to look at the fundamentals and decide if it is going to get better, worse or stay relatively the same. From there you are better equipped to make this decision. Try and take some independent advice such as it may be worth having a talk to a local valuer for their thoughts on where both prices and rents are likely to go.
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz