Hi Everyone,
I really need help about my situation may be one of the guru out there could give me a good advice. My situation is we got 2 rental properties plus our own house. Our 1st IP has no owing with an income of $210.00/week and the 2nd has $160,000 with $190.00/week rental and paying $1250.00/month. Our house has $110,000 owing and paying $350.00/week Now due to changes of income I am now thinking of selling the 2nd property which might sale in the market for $260,000 which I don’t know how much I could get after tax and whatever net cash I’ll get I will pay it to my own house which may be, this will drop down the amount owing and after settling everything and see how much more I have to pay to the bank then I will decide on buying another IP and in this case may be this help me in term of tax . Now will this be a good idea to sell the 2nd property or hold the property? Please help as I really in bad shape in term of cash any idea or advice will be appreciated very much. Thanks in advance.
Sonny
It may be better to sell the property with no finance owing. This may give you more ‘cash’ which can be used to pay down your home loan, and then you could borrow again to invest.
What is best woulc depend on how much CGT etc you would have to pay. This would depend on how much they were purchased for and how much they had gone up.
It would be very wise to get all figures together and then spend $500 or so taking to an accountant – as this could save you thousands.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
What did you buy property 1 for and what did you buy property 2 for.
I would sell the one that returned the best with the least tax liabilites.
You want to chat about this further privately, feel free to pm.
I don’t work for anyone nor do I charge for a chat. I love property and discussing any part of it.
Byronent
Adelaide SAAre you emotionally attached to your home ? and if not could you move into one of your investments if the proximity permits. Also $1250/mth on a $160K loans seems a high repayment is this interest only?
Sonny
Have a think about refinancing and spreading it over a longer time frame as this will reduce you repayments.
Check with the lender you have know and if not happy talk to other lenders.
The idea of selling the one you own outright would be a bad move as this is a income that can assist you with the other repayments.
Quickly doing figures you must have them on P/I at around 7.07%, look at a wealth package or a line of credit loan.
Before you sell any be aware of the GST free for properties purchased before 1982 I think.
I hope this helps
Garry[evo]Hi all, I think Sonny meant CGT and the exact date is 20th sept 1985 . i think sonny was on the right path , i would convert the investment property to I/O loan and if need be draw a line of credit to facilitate interest payments for your investments (it will be tax deductible ). Or you could sell your home and move into 1 of your investment properties. (no CGT implications). But if you do not have great confidence in your properties for potential capital growth , i would sell and start fresh (cashed up).
I meant garry on that last post not sonny apologies for the confusion , i cant type as quick as i think
Hi to all,
Sorry for delayed reply, to byronent- Our 1st property was our previous house (a villa w/ 3 br) which we live for 5 years, then we move to our present house (a 4br)and rent out the previous house. Three years ago we bought the 2nd IP (a 2br townhouse). I’m thinking to sell the 2nd property as this is giving less income after expenses thought this has a potential capital growth for 3 yrs. thanks for your invitation to chat I might do that. Before I forgot tony wpb- this $1250/mth is base on $175K and garry is right this is on P/I at around that interest. Thanks to all your response it does give me something to think of, specially refinancing. Hope some more ideas would come, I really appreciate all the ideas you post. Again thanks.
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