hi to all
i am seeking some advice as what to do.
my situation is this….
we bought our first home 3 years ago paid 95k currently valued at $230k and 18 months ago bought an I/P for $125k currently valued at $200k both are in the same town Mid north coast nsw.
My wife is a stay at home mum and i started a business 12 months ago and our cash flow is very low as the business begins to build this will improve, I/P is neutrally geared and our plan was to renovate down the track as the house only needs cosmetic improvements to make a big difference.
The I/P is on the market at the moment for $209k but i feel that selling now is the wrong way to go but my wife just wants to sell so we can finish renovating our home from the profit made.
What would you do in this situation?thanks any advice greatly apppreciated …..ax6
Hi AX6,
It’s very difficult to advise with out knowing your financial situation and goals.
The wife wants the reno, then perhaps get a loan.
If you sell, your gains will obviously be erroded by CGT, fees and commissions.
You may need to provide details of the financials, etc. for better advice.
hrm
hi ax6
Talk to your banks finacial advicer its free, then your accountant.
Not knowing your financials and business structure makes it hard but the loan would be the way to aim.
Just make sure that both of the above are working together for you to reach your goals.
Selling maybe the way to go if these to two looking at your situation agree, low interest loan looks to me the way.
My advice is exactly that general advice.
Way up all costs.here to help
hi ax6
it sounds like you want to sell, if that’s the case how about this.
Firstly fix up the IP and sell it , (only if the work will increase the value of the property).
To keep the wife happy tell her that 1/2 the “additional” profit you make by working on the IP first can be used by her to add some extras to the home renovations.
I used to make deals like this with my wife years ago when i started buying “Option”, my wife knew they were risky so i had to make a deal that she could have 1/2 the profit for something of her choice while i kept the other 1/2 to reinvest.
regards westan
http://www.nzpropertytogo.com
check it out !Many believe the mid-north coast is going to be a boom area because of the influx of retirees heading that way. If I were you, I’d hold onto it, esp. as you seem to be coping with the cashflow.
I feel that, in a few years, you might regret letting it go. I understand your wife wanting to do the renos. but perhaps you could hold off a bit or do them bit by bit yourself, esp if you say the business is picking up.
The other alternative, as suggested, is to get a loan. It’s relatively low cost compared to the CGT, agent’s commission and legals on a sale as well as the opportunity cost (capital growth) you’ll be sacrificing by selling.
Hope this helps.
Megan
http://www.propertyhub.net
Your Investing and Developing Information Hub.Thanks for the advice to all who replied.
We owe $95k on the I/P at the moment and if we sell should clear about $80-85k
as we don’t have the income at the moment to service another loan i think we only have 2 choices.
(a): keep the I/P and try to get by, then as my business picks up and starts to provide a decent income use the equity in the I.P to buy some more I/P’s and renovate our home bit by bit.
(b): sell the I/P ,renovate our home then use the equity in our home to purchase I/P’s.is it better to use equity in an I/P to buy more or does it not matter where the equity comes from?
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