I have a property in WPH Sydney. I purchased the property 10 years ago and just recently had the old house demolished and a new home built. There is also a separate self contained studio at the rear of the property. It is in a quiet cul-de-sac. I have been in the UK for the past 5 years so need some advice on the best way forward. The property has been valued around $900K and I have a mortgage of $225K so a lot of equity. Should I sell this property and buy a unit or smaller house in the WPH/Epping area and invest in a townhouse on the Gold Coast now (this is where I want to retire to), or hold onto the property, live in it, pay off as much as I can of the mortgage and then sell. My aim is to ensure I don’t end up in a ‘camper trailer’ in my old age (which is getting closer – I am 51 years). I don’t have any other debts and $60K in savings. What is my best course of action and most effective tax course? Thank you for your advice – this is my first posting.[cap]
ChrisHi Chris, welcome!
I do not think you risk the camper trailer just yet, it seems you are doing fine.
As for your retirement plans, it all depends when do you want to retire.You could use your equity to borrow and purchase cash flow + properties or you could sell, buy a smaller unit and use the remaining capital for deposits on CF+ properties (I would prefer this last one) Either way you should target returns around the 10% mark.
The only hiccup is selling your home now that the market is a bit sluggish particularly with properties over 500k out of reach of first home buyers grant and it is and will be more of a buyers market in Sydney for a while.
People on this forum, me included favour this strategy over purchase that target capital growth and have smaller returns, and Sydney seems will not see much capital growth for a while, after the madness of last year.
Others may be able to comment on the Gold Coast market, if there is any CG left there or not.
May God prosper you always.[biggrin]
MarcMy advice would be to sell your house in West Pennant Hills and clear your mortgage of $225k leaving you with $675k. A unit in Epping is worth around $360-400k. You could buy it cash leaving you with $275-315k to purchase a townhouse in QLD. Townhouse on the Gold Coast is worth approx $400k so your borrowings would be approx $85-125k. Use the rent from the unit in Epping to pay off the townhouse on Gold Coast.
1Hot, I never discount others opinions/strategies, but I would advocate not to sell (personal opinion of course).
Chris, do you wish to get into property investing? You are in an awesome position to do so if you do.
The one thing that will be involved is CGT if selling your house – unless you lived in it first, and have been out of it less than the 6 years. It sounds like that could be the case, so selling might be the go – although check with your accountant as I’m not sure how the demolish and build scenario would affect that?
If you don’t want to return to Sydney, then maybe you are best to sell, and buy the house you want in the sun, and maybe invest the rest into properties that will help your cashflow in retirement. Perhaps also up in the sun, rather than in Sydney if you don’t wish to return there, or hold any property there.
Cheers
Mel
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