Myself and two freinds have a property that is costing us $700 per month after the rent we receive. Which is ok to negative gear, if we start paying extra per month it’ll probably take minimum 5 years before it will pay for itself. Current equity on this property is approximately 12% of the value. The current growth is 8% per year. So! Should we hold and start paying extra or should we sell?
Hello Molly,
Is the 700p/m each or all up. If it is all up that's $54 per week each. Personally I make significant lifestyle sacrifices now to hold properties to enable a better lifestyle later.You may look back and regret it if you sell now. See if you are maximising the potential of the property . eg; Are you using depreciation? Are you financed competitively? Is the loan interest only? Are you able to increase the rent? Have you implemented a Taxation Variation Authority? These may help ease the burden a little. If there is only 12% equity split 3 ways, if you sell ther will be little left over once fees and charges are paid out. The only time selling a property is a viable option (if it is an option not a necessity) is if you are going to move the money into somewhere which will perform well enough to cover all of the entry and exit costs and perform better.
It's the time in the market that builds wealth.
All the best
Jeff
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