Clearing negative equity: should you hang tight or cash out?

For some accidental landlords, it has been a decade of playing what must feel like a zero-sum game

So while sticking with your negative equity property may feel like Stockholm Syndrome – so long a hostage you develop an alliance with your captor – as a survival strategy, it may be one to consider.

So while sticking with your negative equity property may feel like Stockholm Syndrome – so long a hostage you develop an alliance with your captor – as a survival strategy, it may be one to consider.

Many accidental landlords who bought apartments at boom-time prices, white-knuckling it through 10 years of negative equity, are now coming up for air. But if the market value of your rental property is at last greater than the outstanding mortgage, should you hold tight or cash out?

For the generation who bought their “starter” home just before the crash, it has been a decade of scary bank statements. As the usual life events unfurled – moving in with a partner, starting a family or pursuing work overseas – paying down debt on a property worth less than its purchase price has been stressful.

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