Dealing with an Underperforming Property This 2015

ROBINA, Australia - Dec. 18, 2014 - PRLog -- Many people in the know expect Australian properties to slow down in 2015 with capital growth not to be as strong as it was during the last 12 months. Given this, investors are advised to be more strategic in their property selectio.

As for those with already have an underperforming property in their asset portfolio, experts advise it is about time to consider divesting. For one thing, the odds are great that those assets will continue to disappoint.

Metropole Property Strategists director, Michael Yardney, recommends that investors review their investment portfolio and start asking themselves the following hard questions:

Is this property meeting my expected performance?

If it isn’t and is showing no sign it ever will, maybe it’s time to think of an exit strategy.

Is this property exceeding market expectations?

Yes? Then it’s a keeper.

If this house were on the market today, would I consider buying it again?

Weight whether the property is a liability or an asset based on its previous performance.

Is there something that can be done to improve this property so that it generates better ROI?

Neglect can cause a house to lose its value and appeal to tenants. A little makeover can do the trick.

What is the possibility this property will outperform market averages in the next 10 years or more?

A number of factors can drive property price and determine whether or not it will be profitable in the future. Among which are population, resource boost, employment, affordability, supply and demand, and interest rate.

Property investment is supposed to be a long-term endeavour, but sometimes, selling up is the right thing to do in order to cut one’s losses and allow himself the opportunity to invest in new and more profitable property.

And often times, one doesn’t have to wait for the market to get better, because the longer one holds on to an underperforming asset, the more investment opportunity he is going to miss. Not mention, the gap between a low performer and a top performer only gets wider as months or years pass. Catching up is out of the question. That is why investors are advised to act now and act fast.

However, if the underperforming property is tenanted, Yardney recommends that is should be sold at or near the end of its lease term. Doing so will widen the asset’s appeal, making it more attractive to potential buyers, either investors or owner-occupiers.

The next 12 months offer investors another chance to re-examine and improve their property investment strategy as well as consider an exit plan for properties performing bellow expectation. But the challenge is learning to let go without the “what ifs”.   This is where property investment consultants and advisers come into the picture. The experts can help you decide whether you should hold on or let go. So, when faced with indecision, don’t think twice to seek expert help.

For more investing advice and tips, visit Buy Australian Properties (http://www.buyaustralianproperties.com.au/) and learn how we can help you.