Even the best of planning can’t mitigate every property investment disaster, but how you react can make all the difference, as Heroly Chour found out in Logan.
“I purchased a two-bedroom townhouse in Logan Central in March this year. It wasn't my first purchase in Logan and, based on previous experiences, I thought that it would all go fairly smoothly.
The property was vacant upon possession, but I thought that finding a tenant would be a breeze and that it would be cash flow positive from the get-go. After all, I didn’t need to do any work to the place – it was ready to be leased out as soon as it came into my hands.
Soon after settlement in April (which all went through without a hitch) it became very clear that the process of finding a tenant would be much harder than I’d planned for.
Four weeks went by, and I had to drop the rent. Another week went by, and I dropped the rent again. My property manager just wasn't having any luck finding a tenant.
I suspect a large part of the problem was down to the large release of housing rentals back onto the market by one company, which resulted in an absolute mass of rental properties all becoming available at the same time.
Frustrated at the lack of interest being fielded by my property manager, I decided to enlist a second agency to advertise the property. In hindsight, that was the best decision I made.
The new property manager found a tenant within two weeks, and signed them up at the initial rate I had been asking for. I think a lot of the time in smaller cities like Logan, a lot of your success depends on who your agent knows. In this case, my new agent already had contacts lined up for my property.
Since finding a tenant, I've had no issues with the property. Those seven vacant weeks have, however, meant the difference between the property being positively and negatively geared for this financial year. Not having a tenant for such a long period of time massively threw my calculations off.
But that’s how property investment goes – you have ups and downs, and the trick is just to minimise your losses and move on. As I tell everyone in my investment circles, don’t let one bad experience ruin your property investment journey.
The bad experience hasn’t put me off Logan, either. In fact, I'm in the process of finalising another purchase there.
The local council seems to be quite progressive in its development approach, even making it easier to create dual-income opportunities by way of building a granny flat – something I plan on doing with this next purchase.
Logan is also benefiting from the tightening yields and increased prices up north, with values starting to increase and signs of gentrification slowly emerging. I’m struggling to convince vendors to sell for a price lower than $300,000 (unless it’s a distressed sale).
They are all positive signs surrounding the future value and yields of my Logan properties, making me certain that this rental experience was just a small blip on the radar.”