We’re in a Pickle

Hi Scott,

My boyfriend bought a one-bedroom apartment in Brisbane’s inner city three years ago for $404,000. We are in desperate need of more space and would like to sell, but a recent valuation has put it at $320,000. With $350,000 still owing on the mortgage and only $20,000 in savings, this puts us in a pickle. Renting the place out will not cover the mortgage, and by the look of Brisbane’s property market the value may continue to decrease. What is the best way to deal with this situation?

Anita

Hi Anita,

The way you’ve written your question tells me you want to sell: you’re ‘desperate’ for more space, renting the place isn’t an option, and you’re worried the apartment will drop further in price. All of these things may well be true, and if they are, you should save up the shortfall and sell. However, it was only three years ago that your boyfriend bought this joint. So before you crystalise the significant loss, I’d want to understand why he bought it in the first place. What was his plan at the time?

Scott