Hi guys I am 27 yrs old living in townsville north qld, I owe 150000 on my own home worth bout 250k and have a 5 bedroom rental worht about 350k and owe 265k on it i am looking to buy more an more but not sure if i should sell my home or the investment. looking for help … thanks
Hi Unreal
It is a common question i get a lot and usually give the same answer.
With regards to your PPOR then only think about selling this if the property is unsuitable for your current circumstances. If the property is suitable to be rented out why not retain it and lease the property out and get the continual benefit of the capital growth.
Now with regards to your IP i must admit i am of the belief that you should never never sell. Selling involves paying agency fees as well as CGT and will leave you with less money than current equity.
Why not look at re-structuring your current loans and then use the available equity to further your wealth creation.
Remember that CGT is only payable once the property is sold. If you keep it long term then you will never pay tax on the unrealised profits but can access them for future borrowing.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Hi Unreal,
while everything Richard says is true, I do not agree with the never sell attitude. Read Steve’s 3rd book where he gives samples and suggestions. He has an exit strategy for each and every property. In my understanding this is twofold.
1. If a property does not perform to his expectations, he gets rid of it.
2. If he had a lot of capital growth (= the yields have gone down), he prefers to ‘divide and conquer’. With this he means he sells the property and tries to find a market where he can get two properties for the same price as this one property. Not only does this allow him to grow faster, increase his cashflow and reduce his vacancy risk, he also likes to show his CG in his tax return as it helps secure future finance.
Steve has outlined this very well in his 2nd book “$1,000,000 in property in one year” on pages 114-115.I might need to redefine what i mean by never never sell.
I totally agree that you should sell an unperforming asset especially if you can time it in a year that you have losses to balance any gain or vice versa.
I built my cash flow up over the last 10 year in wrapping and this enabled me to fund my lifestyle and also my buy and hold properties.
A combination of both will get you to where you want to be quicker.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
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