- KiwiNZParticipant@kiwinzJoin Date: 2020Post Count: 0
We have a property in Whyalla SA that we bought when we moved there and it seemed like the town was about to take off and the prices couldn’t get lower. We paid $270k + stamp duty. When we left we opted to rent it out fully furnished and have never had trouble with getting tenants. It rents out at $430/ week through an agent.
We have listed it for sale for a year now and we have not had any interest in it. Currently we live in Newcastle where the property market is quite hot and places are selling quickly. We want to get into the property market up here and get something around $600k, we owe about $140k on the house in Whyalla, have no debts, no children and about $20k savings.
Would you keep the investment seeing as it is paying itself off and borrow $600k and pay the $10k borrowers insurance? Or get whatever you can for the place in Whyalla and move on?
My feelings are the longer we take to get something in Newcastle the more and more we will have to pay.
Any advice appreciated.TerrywParticipant@terrywJoin Date: 2001Post Count: 16,213
Its hard to say.
Do you think the value will increase?
are you able to borrow?
Is it holding you back in some way?BennyModerator@bennyJoin Date: 2002Post Count: 1,416
To me, one of the major questions is this – are you wanting to buy a house in Newcastle to be your own home, or to be an Investment Property? Depending on your answer would change what I would do. Here’s why:-
1. You have some good equity in the Whyalla place – if it is not selling, that could mean you are asking too high a price for the current market. That equity is available to you if you sell, with no CGT to pay either (as it was your own home). And that way works well if you are wanting to buy “your own home” in Newcastle as it provides you with a sizeable deposit.
2. If you want to buy an Investment property in Newcastle, then you might instead borrow against the Whyalla property (use some of that equity that is just “sitting there” right now) to help to buy the new IP – any loans are deductible, thus helping your income stream. But then, this depends on your current Income and how secure it is. If you are employed and quite stable, or you run a successful business, then this way might work out well for you.
Whichever way you go, there will be different angles that you will need to consider. Terryw has already mentioned some, but there will be a host of others depending on your first decision (above). Do come back to ask more….. :)
Do check out the link I sent you in your Welcome PM – the “big picture” link. It has some really worthwhile thoughts (also from Terryw) on the various options when looking to sell or keep a property that has been your own home. Some valuable points in that one – actually, I’ll post it here, so others can find it too:-