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  • Profile photo of HarleySHarleyS
    Participant
    @harley89
    Join Date: 2018
    Post Count: 0

    Looking for general advice, input, feedback, opinions.

    what you you suggest for my situation? I just inherited a property in Blacktown NSW (a 3br with a February valuation of 750k)
    I live in Geelong victoria and do not yet own property here, i cannot move due to work, should i put the Sydney property on the market and buy two down in Geelong (a residence and an investment) only borrowing a small mortgage. Or should i rent out the Sydney property and use my savings and newly increased income to buy a home in geelong (borrowing about 500k)
    The Sydney property i inherited is debt free.
    I earn roughly 47k a year, the agent says i will earn about 22-26k rental income p.a before tax and fees. Blacktowns growth is arround 8.6% annualized which is more than what i would get in most Geelong suburbs for a similar price bracket.
    Thanks

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    That is really a personal decision with a bit of growth predictions thrown in.
    Selling one property to buy another will generally eat into about 10% of the value, assuming CGT free, as you have agents fees, stamp duty etc.

    But it could work out better as you would be saving non-deductible interest.

    Consider some alternatives such as a related party sale.

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

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of csargent89csargent89
    Participant
    @csargent89
    Join Date: 2019
    Post Count: 0

    I got no idea about the Sydney suburbs so I wont comment on that. Geelong however is a sound investment it will continue to keep booming as they try relieve pressure off Melbourne, even nearing towns like Winchelsea etc are feeling the benefits of geelongs extension. It all comes down to do you want capital growth or cash flow? Cause from what im aware Geelong is pretty average on the rental yield side of things compared to places like Hobart and parts of QLD.

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,325

    Hi Harley,
    This is where “your own situation” is most important. What does your situation need? Cashflow or growth? In all of that though, remember that cashflow is king. Like, if you suddenly don’t have a job, then payments (if negative geared) can become a monster that could eat you alive.

    You are in a great situation to make a considered decision. Such an injection of equity can be the start of a huge change in your life. As such, do give it some time to check out all options…..

    Though your options aren’t likely to be unlimited, this is a huge “leg-up” should you wish to change your job (if you don’t like it) by e.g. buying into a franchise that you DO love. Or it can set you up with property (of course), but also shares, or some other investment type.

    Take the time, and even spend some dollars on your education, so that when you make your next move, you will already be convinced it is “the right move for you”.

    Re property itself, growth is nice, but even better is buying something you can afford even if you lost your job, so having more rent coming in than expenses paid out is quite desirable. As you said, you might look at buying two properties rather than keeping one that WON’T pay for itself. Remember too, it is good to be able to sleep at night, so keep your next move as stress-free as possible.

    A good way to do that is to avoid a negative geared property (Blacktown?) that costs you extra money each week. Start with one that puts money in your pocket each week. I recently attended Ian Ugarte’s day seminar that shows a way to increase the income of a rental property markedly – his way can even take a negative geared property and make it positive. Perhaps that can work for the Blacktown property too – I don’t know, but others will.

    Good luck with your choices, and remember this – “If you think education is expensive, try ignorance!”
    ;)

    Regards,
    Benny

    Profile photo of JuergJuerg
    Participant
    @juerg
    Join Date: 2017
    Post Count: 1

    Hi Harley,
    Nice inheritance mate!!!
    I used to own in Blacktown and it did very well for me.
    I wish Steve’s course was about when i bought though! First one in 1999!
    Benny mentioned Ian Ugarte. My partner and i also just joined. If you like e-mail me more details and i will have a closer lock at it. [email protected]
    Cheers

    Profile photo of clandcland
    Participant
    @cland
    Join Date: 2015
    Post Count: 5

    This reply has been reported for inappropriate content.

    This might help from money side of things,

    SellOrHold.com.au

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