The $500,000 Headache
Hi Scott
I have made two horrible financial decisions: I bought two apartments off the plan in the Pilbara a few years ago from a dodgy ‘armchair developer’. We paid $1 million, and they are now worth maybe $500k. Even worse, one is in a trust/company structure. Our cashflow can handle the costs, but we are left with no ability to invest. My question is, who do I go to for advice? Accountants do not ‘advise’ and there is no money in it for financial planners. I want to get my family out of the mess I put them in!
Christine
Hi Christine,
There are two questions here.
First, you want to know whether you should sell the properties.The only advice I can give you is common sense: time never turns a dud property investment into a good one … just an older one. So I’d suggest you offload them. But only you can pull the trigger -- it’s your money after all.
Second, if you do sell them you’ll incur a capital loss (in both your personal name and the trust/company name), which you’ll be able to bring forward and offset against the capital gains you get when you do make some better investments in the future!
Scott