Hi all,
Despite the suburb of “Innaloo” is in a good location in Perth…lol. My dilemma is to hold or sell one of the duplex properties that I developed a year ago.
Value of each duplex $330-370000
Debt on both properties $380000
Rent $260 eachSo at the moment I’m negatively geared and I think that the property has reached its max level for now. Although, the area I expect will increase with value quite well due to its location.
If I sell one property it will pay off most of the debt on the loan, leaving me owing between $10000 on a good day to $50000, which will mean that I will be left with positively gear property with high equity value.
The question is firstly how much Capital Gains will I owe if I sell one property (seeing that all the profit is going back to pay the loan). And the second question I guess goes back to Buy and Hold regardless, or sell a good property and go for +ve cash flow.
Any opinions?
Hi Micasa – the CGT depends on what they cost you to build. Don’t forget the GST as well… they are considered new properties if you sell within 5 years I believe.
The next question would be what will you do with this money – where wil lyou find cf+ property?
Extensive list of ‘Off The Plan’ property available for sale in Perth.John – 0419 198 856
There would be heaps of capital gains tax to pay, so why sell? If a good area, just keep and access the equity to buy more.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Will the extensions to the Shopping Centre assist price wise? From what I understand, it should be complete early next year!
Is a really unfortunate name for a suburb, but I assume the translation means something very different to the way it sounds!! Is a good suburb and worth holding if possible!
Thanks for the replies.
I had not considered the GST cost for one thing so thanks for that info. The main reason for selling was to pay off the debt and end up with a +ve cash flow. I could borrow on the existing equity as suggested, but I though I would be in a better position cash flow wise if I sold. Both buildings cost me $250000 to build and the land cost was $210000.
The area has experienced rapid growth over the last year (the same fibro house that I bought last year on a triplex block for $210000 are now selling for $340000+ if you can find any) there has been a large number of developments in the area, which may indicate an oversupply in the near future. The area is close to everything and the shopping center is expanding so I can’t see that the location will lose any appeal, but the prices are getting high for your average family income, hence the though of selling before the market peaks.
I’m leaning to holding at this stage!
Hi there,
I would only sell if there was an issue in regards to servicing loan.
Innaloo is well located and with future developments will have great potential for long term growth. Just look at the surrounding suburbs, cant really go wrong.Certainly hang onto these – Innaloo is reasonably close to city, beach, transport and employment oppotunities.
Long term it will be a great investment.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
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