TIME TO DITCH THAT DOG
by Neil Jenman
Article written and provided by Neil Jenman from Jenman.com.au . To see the original source of this article please click here. https://jenman.com.au/time-to-ditch-that-dog/. Neil Jenman is Australia’s trusted consumer crusader. He can support you, all the way, from choosing an agent who will get you the highest price guaranteed to when your removalist comes! You get an unprecedented level of total support. All for free. To find out more visit jenman.com.au
Reading time: 3.5 minutes apx
They’re known as “dog properties”, the dregs of the real estate world. They’ve got so much wrong with them, so many drawbacks and disadvantages. They’re almost embarrassing.
If you rent them, it’s near-impossible to find good tenants which then compounds the pain – bad tenants who won’t pay rent on a bad property.
And then, if you try and sell them, they sit on the market for weeks, month or even years. The only way to sell “dog properties” is to almost give them away. Or hope to get lucky with the ‘bigger fool theory’ and find another silly buyer.
People buy dog properties because they fall for one of the worst of the common lines in real estate – uttered by both spruikers and agents: “It’s only an investment/starter property, you don’t have to like it, you just have to like the numbers. It’s better than nothing.”
That’s nonsense. Many people lose money on dog properties. You’d be shocked if you knew the truth. Some properties perform terribly, year after year. Dog properties.
How stupid to tell people to buy properties they don’t like. Dog properties are trouble. Like a bad partner turns you off getting married, dog properties can turn you off real estate for life.
How terrible to have a property that hardly appreciates, is high maintenance, no end of worry and trouble and then, to make it worse, impossible to sell for a decent price.
NO BOOM IS PERMANENT.
Right now, most of Australia is in the grip of an unprecedented real estate boom. People – including inexperienced investors – are falling over themselves to buy property, any property. FOMO (Fear of Missing Out) has taken hold almost everywhere.
Some people are buying anything, whether they like it or not – and they are prepared to max themselves out to the limit. It’s frightening to think what the future may hold for some of these people who are breaking one of the golden rules of investing – “Buy in gloom, sell in boom.”
Still, it doesn’t matter how hard you try to warn them, the lure of the crowds, the stampede of the buffalo herd charging in the same direction, is hard to resist.
It takes enormous discipline, not to mention financial knowledge/history and, of course, common sense to stand against masses. We should remember the Spanish philosopher, George Santayana who once said: “Those who cannot remember the past are doomed to repeat it.”
Without wanting to be a doom-sayer – or, worse, a party-pooper – all I will say now is that there has never been a boom that was not followed, at some time, by a bust. For the lovers of folk songs, think of Harry Chapin’s 1972 classic Circle and you’ll perhaps grasp the meaning of sunrise and sundown. Of night-time and day-time. Of good times and bad times.
Now is the time, therefore, to ditch that dog property you’ve had for years. Or any property you regret buying. No boom has ever been permanent. And the most dangerous words in any boom are these: “This time it’s different.”
‘Zero based thinking’ means to look back to a point in time when you did something important – got a job, found a partner, or bought a property – and ask yourself the question: If I knew then what I know now, what would I have done? If you would not have made the decision you made back then, well, now is the time to exit.
And there has probably never been a better time to exit a bad property than now.
There is a well-known maxim in investing: Bad investments rarely turn into good investments.
And one thing I can assure you from a lifetime of observing the property market – the time to off-load (yes, SELL!) dog properties is during a boom. It is not only the best time to be selling a dog property, it’s often the only time – if you want a half-decent price.
Do not hang on, thinking prices may go higher. Get out while you can.
The opportunity is here now – grab it and escape.
Sure, prices may go higher. But there is another investing truth: No one – not even the smartest and most successful investors – know how to pick the exact top or bottom of any market.
All the successful investors do know – and this is what makes them successful – is that there are certain solid rules you should observe. Aside from the fact that bad investments rarely magically turn into good investments, the golden rule for selling is: Always sell into strength.
The market is strong now. It’s the strength you need to sell for a good price.
So, if you can get a good price for a bad property, take it now, while you have the chance. Who knows when you’ll see a boom like this again? Don’t squander the opportunity.
They say we are all smart in hindsight, but it’s foresight we need to develop. We need to use our knowledge of the past to look ahead and be reasonably sure what’s coming one day.
Good times never last.
There was a famous bumper sticker back in the early 90s that said: “Please God, give me one more property boom and I promise not to muck it up next time.”
Well, in many areas, you have that boom again now – so what you going to do? Follow the herd and break golden rules of investing – or start giving your investing life serious thought?
Who do you think is likely to be more correct? The masses who are buying any property they can get their hands on OR wise investors who observe some golden rules?
If you own a property you wish you’d never bought, a property that’s barely appreciated – and there are thousands even though you rarely hear about them – now is the time to sell.
One thing you can count on. One day, the boom will end. And, like a game of musical chairs you don’t want to be standing – holding a dog property – when the music stops.
All I can tell you is this: If it was me, I’d be selling my dog properties now.
And then I would wait. The boom will end. The gloom will arrive. And that’s when I’d be looking to buy – but top-quality property only.
Yes, I know, it’s hard to go against the herd. But history has proved, time and time again, that the best time to buy is in a gloom and the best time to sell is in a boom.
In many areas there has never been a better time to sell.
Ditch that dog now, while you still have the chance.
Please note: We do not charge sellers for our support. Nor do we ever ask you to sign any agreements. Our entire focus is to protect your interests.