3 Tips to fix a property disaster

Let’s say you own an investment property and you’re at risk of things turning pear-shaped. Perhaps you overextended yourself financially, or you’ve run into trouble with dodgy tenants? Whatever the problem, there is always a potential solution. Helen Collier-Kogtevs from Real Wealth in Australia explains.
1. Reinforce your finances
If you are facing financial difficulties for a particular reason, such as a prolonged tenant vacancy, then you need some funds to help you manage the situation at hand. My advice would be to immediately focus on creating a buffer account. If you don’t already have a cash buffer account at your disposal to help you deal with unexpected financial emergencies, I suggest you focus on creating one immediately. Savings from your salary, tax returns, redrawing equity in your home loans – do whatever it takes to create a cash buffer account, ideally offset against your PPOR mortgage, so that you are in a position to make clear decisions, without being ‘forced’ to sell any of your properties from a place of desperation. At the same time, make a serious and concerted effort to pay down any ‘bad debts’ such as credit cards, as they chew through your disposable income and divert precious funds and resources away from your investing pursuits. Ultimately, if you do not have a tenant, you want to do what you can to get a tenant in place to ensure you have some rent coming in so that you are not having to fund the full mortgage repayment each month.
2. Get your head out of the sand
Often when a situation is turning negative, we may avoid facing up to it – and this can be a very costly mistake to make. I’ve seen many investors who have needlessly gone to the wall financially, often because they didn’t face their financial woes early enough. The sooner you take a proactive approach, the sooner you can put the right steps in place to turn your situation around.
3. If necessary, seek help
A trusted property mentor, a friend in the industry, a colleague who knows property inside out – turn to those people you know and trust for advice, as they will be able to help you review your situation from a clear, unbiased and objective place. Importantly, they can then help you to strategize how to move forward in a positive way. Remember, there will always be new opportunities to create wealth through real estate, and by having a clear strategy and flexible, honest approach, you place yourself in the best possible position for property success.

Source: http://www.canadianrealestatemagazine.ca/expert-advice/item/2065-3-tips-to-fix-a-property-disaster