If you’ve been following my Facebook page for a while you would have noticed that I like to ask people what property topics are of interest to them and what they want to know about me. Questions I’m usually asked come in many forms. What is negative gearing? How old was I when I first got into the property game? When’s a good time to buy? How many properties do I own? The list goes on. But recently I was asked a question I felt compelled to answer.
Have I ever been burnt investing in property?
The question got me thinking about all of the property transactions I’ve been involved in since my first purchase as a teenager. Perhaps through a mixture of luck and a drive to continually educate myself on the property sector to avoid this situation, the answer to the question is no. But that doesn’t mean there hasn’t been hairy moments along my property investment journey, one of which I’d like to share below.
There was a time when I’d made two property purchases and wanted the third to be my dream house. I had specific ideas about what I wanted the property to look like but first needed to find a shitter – the worst house in the best street with scope for improvement. Having sold one investment, developed savings through work and with one fully furnished unit being rented, I thought it was the perfect chance to put my industry knowledge into practice with a renovation.
Once I’d found and bought the property, I figured that the best way to move forward in terms of renovation was to firstly move in. Once I did so, I discovered that the building and pest hadn’t picked up on the roof leaks, air conditioning issues, the missing hot water system and lack of door locks for security. Then there was also the issue of having to get new walls because the old ones were riddled with asbestos. Talk about a rude shock.
Ultimately, getting the house up to standard caused me to spend more money than I’d allocated. I’ve always been a glass half full type, thankfully, because If I wasn’t I’d be looking back on this property transaction as my first burn. Instead, it’s a learning curve because I pulled through. I learned to always be prepared for unforeseen costs that pop up when buying property and that nobody tells you that shitters might not be immediately liveable before you buy them.