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Hi all,
We have lived in our 1st house for nearly 2 years and have bought our 2nd house which is now our PPOR. Trying to sell the 1st house, but may not get the price we want for it (about $290k).Should we keep the 1st house as an IP?
Or should we sell now at slightly lower price ($270k-$280k) and take advantage of no CGT? Then we could put the profit into lowering the mortgage on our new house and then search for a more suitable IP later.
The 1st house would rent out for $220pw and there is $165k owing on it. Inner suburban Adelaide 6km from GPO.
Any help?
Thanks.Hi Fnomna
i would take the selling your property option. I’d then reinvest that money in a home that was showing a higher return or invest the money somewhere else for a better return. I even rather have the money paid off your mortgage than in this IP which is costing you money. The property as you have said will give you tax free money if it is sold.
At the moment it is costing you to own this home if you sold it and got the 100k equity out, at least you will be saving around $7000 a year if it was put on you mortgage.
So unless you felt the home was likely to appreciate in value in the next few years i’d get out and as i’ve said buy a cheaper property as an IP, reinvest or reduce debt.
what do other think ?
regards westanI live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
I agree with Westan.
In the big scheme of things, a $10K hit right now on sale won’t cost as much as the negative gearing and extra mortgage you’ll have on your new PPOR.
Sell, put money towards your new PPOR, then reborrow that money so that it is tax deductible and buy IPs from there…
I guess it also depends if you want to own IPs – at the moment it looks like you are considering it cos you can’t sell your house? A lot of people become investors that way from what I’ve read (Jan Somers book/research from memory).
Cheers
MelBased on the number you have provided, you would have to be a lunatic not to sell it.
Thanks to all for your replies and kind advice. I am new to this site and new to property in general!
Your advice generally agrees with what we heard from one R/E agent (not the one we are selling through ATM). It seems to make sense to sell now for a bit less than we would like and put the money into our new PPOR mortgage.
Then down the road when we are good and ready to seriously start investing we can plan it out and look at all our options more carefully.
Now we just hope we can get get offers for even that amount.If it doesn’t sell with the current agent – what about an auction. What’s the general opinion with people here – are auctions ok or do they get you a lower price (Jenman theory!)??
There are just so many options and things to take into consideration! Not to mention that we are both trying to get ahead in our jobs and then there’s the other major events still to come like a wedding and kids!!!
Thanks again and good luck to you all with your ventures! Will continue to read as much as I can from this forum and hopefully learn a bit!
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