All Topics / Help Needed! / Is it better to sell or refinance to buy another property?

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  • Profile photo of MerlinMerlin
    Member
    @merlin
    Join Date: 2002
    Post Count: 11
    July 14, 2009 - 11:07 am

    I have $50,000 equity in an IP and would like to buy another one. Is it better to sell and use the profits as a deposit or refinance the loan to pay for the deposit?

    This IP is breaking even on cash flow.

    Thanks

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    July 14, 2009 - 12:29 pm

    That is not enough info to decide

    How much CGT and selling costs will you be up for? How much stamp duty on the next one? Is your PPOR paid off?

    Do you realise you will be selling one property to buy another? that is what it boils down to

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,856
    July 14, 2009 - 10:28 pm

    Pretty much as Terry points out.

    Also add: whether you have the capacity to pay the new loan in addition to the current one (in either situation), will there be break fees on the current loan?

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