All Topics / Help Needed! / Sell in Surfers Paradise or Pay it down?

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  • Profile photo of Robs132Robs132
    Join Date: 2016
    Post Count: 4

    Hi guys,

    Looking for guidance on current situation

    Here it is:

    1. I have one property in Surfers Paradise. Purchased at $196K and loan of $159k with $100K sitting in offset so servcing IO loan of $59K at 5.15% IR (positively geared). Rent of $230 p/w (now valued at $186K)

    2. I have a property in Maroubra (Sydney). Purchased at $625K and loan $496K but I’ve taken out $100K in equity so loan is sitting at $600K with 4.5% IR (and property valued at ~$800k) (negatively geared). Rent of $460/pw

    3. About a week away from buying a property in Melbourne for ~$380K with $100K down so loan will be $280K at ~4.5% IR with $420 p/w rental income

    In light of potentially rising interest rates in next few months I have two questions

    1. Should I put as much into surfers property as possible now so I effectively have one fully paid off property and then use the income to put towards paying down Melbourne?


    2. Should I sell Surfers Paradise and put all funds towards paying down other two properties that are much better? This will lock in a loss but frees up funds to put against much stronger properties in offset.

    Aside: Surfers was purchased for $196K and is now valued at $186K. I used Nathan Birch to make this purchase and have followed up for guidance around what I should do as after paying $10k for his service he did not deliver on what was agreed (i.e. purchase property below market value)

    Not surprisingly Nathan and his colleagues have stopped responding however they are very communicative when he wants to sell you something. – BUYER BEWARE of this spruiker. He will take you for a ride. If you want my full Nathan Birch review and experience PM me (quite awful really)

    Thanks for all your guidance and help!


    Profile photo of Ethan TimorEthan Timor
    Join Date: 2016
    Post Count: 282

    Hi Rob,

    Generally speaking it does make a lot of sense to offset the loan that carries the highest interest (that is assuming one has no other debt, mainly non deductible debt).

    Why is that loan so expensive, by the way?

    Should you sell or not is a question that I suspect nobody here can answer for you. Who knows what will the value there be in 2/5/10/20 years? Selling also depends on your overall financial position, alternative yields and future goals.

    One last note, I usually calculate “positive/negative gearing” on 105% of the purchase price, not on the actual loan repayments as it’s a more holistic way of looking at it I reckon.

    Hope this helps? 👍😎

    Best regards,

    Ethan Timor | Aligned Finance Pty Ltd
    Email Me | Phone Me

    Active Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)

    Profile photo of Robs132Robs132
    Join Date: 2016
    Post Count: 4

    Thanks mate :)

Viewing 3 posts - 1 through 3 (of 3 total)

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