Carly wanted to increase her portfolio from three properties to six in the next five years.
One of her current properties, a small unit located in a regional NSW town, had a minimal mortgage of $90,000 and was returning $135 per week.
As low figures were involved, Carly believed it was okay for the property to remain in her portfolio.
“That property’s fine, it’s just ticking along,” she told me.
Once we evaluated the property using the Property Performer Template, however, she realised the truth: the unit was stagnant as it was not increasing in value, nor was it returning positive cash flow.
It was a low-maintenance, low-cost property so Carly hadn’t paid it much attention and in doing so, she failed to address the most important question:
After her mortgage broker completed a tailored Bank Plan…
And she completed my ‘is your property a dud’ checklist on page 27 of my Red Book, Carly discovered that if she sold the property and paid off the $90,000 mortgage, she could use the profits from the sale as a deposit on a new property worth up to $300,000.
This allowed her to redeploy the funds from her stagnant investment into a better quality, higher returning property.
How about you?
Are you sitting on a ‘dud’ property that’s holding your portfolio back?
