Hi guys
Really need your help and advices to take my next step of property investment.
I bought a 2/2/1 apartment (meriton) in Wolli Creek in 2010, by $470k with standard 80% loan package.
I used FHOG so though it had been rent out for the first 9 months I moved in this March (just to meet the 6-month requirement) and is currently moving out again.
So basically I treat it as my IP. By talking with the agent I am aware now it could be sold for about $500k and I now secure a rent rate of $520.The mortgage/interest costs me app 2200/month, all offset by the rents of 520/week. However the other expenses add up to 1500/q or 6000/year (strata, council & water). So currently it costs me extra $500/m to hold it but by getting tax back (depreciation etc) the actual expense for me to hold it is approximately $2000-3000/year.
I am now a little bit concerned about how I should take the next step, here are my thoughts by holding it:
pros:
1) it doesn't cost me too much in holding it, and I am having a quite secured full time job.
2) shopping centre in Wolli Creek is under building (cranes etc) and IKEA in Tempe is opening. Other retails like cafes are also opening in WC.
3) interest rate cut is expected. and I have some spaces to raise the rent rate (from 520/w to 550/w).cons:
1) it seems the over-supply in WC is inevitable (too many off-plans). I am not sure how it will offset the potential capital growth brought by the retail development such as shopping centre.
2) high strate rate. even with swim pool, SPA it seems 1100/q is a little bit overpriced.So I am not very sure if I should cash out immediately after the shopping centre is built (within 1.5 years) or before it. The massive development there is definitely a positive, however the timeframe coincides the completion of those off-plans.
Or should I take equity out (40k maybe) to hunt for other opportunities around in light of the current buyer market?
Much appreicated if you please share your ideas
Thanks
Philjust to add currently I am borrowing $360k. I am able to put app $30k per year into the offset account if I don't take any other investment plans.
any ideas???
You will probably find that the property has not appreciated since purchase but would have dropped 10% or more – just the nature of new buildings, so don’t bank any windfall gains just yet.
Due to high transfer costs you might look at taking out some equity & buying again.
but normally the sale of similar units has indicated the price rise of 3-40k..it’s not a brand new building but 8yr old
Phil , the sales market is quite weak at present – look @ days on market & the level of discounting that is occurring, agents won’t tell you that.
You may look to buy a 2nd property & take advantage of the weak conditions vs strong rental market especially if you have the equity & ability to pay $30k pa
You must be logged in to reply to this topic. If you don't have an account, you can register here.
