Ask Paul: No-one wants to buy our mining town investment properties
Q. What do we need to do with property that isn't selling, even with a price drop to match market conditions?
We purchased the property in 2009 through our family trust.
The purchase was for three new three-bedroom, two-bathroom townhouses on a DA-approved lot in the town of Dalby, in south-east Queensland.
The townhouses had renters signed up for 12 months and options to extend the rental agreement. Then the wheels started to fall off.
As with most property around that time the rental returns were great, but with the downturn off the GFC and the end of the mining boom the returns have dropped.
We currently are lucky to have them all rented on six-year leases.
We have had the property on the market for two years, with one inquiry.
With the ongoing cost of holding property and lower rental return, it's now cost us thousands yearly with rates, loan repayments and general running costs.
Could you please give some insight into what steps to take to get us out of the hole and on the right track? - Jamie
Hi, Jamie. Unfortunately, neither my decades of experience with money nor my rather flawed crystal ball are going to help you.
The lesson is one you already know.
Buying property in one location, meaning you have significant risk exposure to one area and, in this case, one industry, is just not the way to go.
You have done the only thing you can, which is drop your asking price. The other possibility, of course, is some sort of employment revival in the Dalby area.
The one bright piece of news is you have them rented for six years - that is positive for potential buyers and helps cover your running costs.
I really wish I could pull a rabbit out of a hat for you, but there is no magic here.