Hi i’m a young investor and lack a bit of experience, i would like your opinion on my current situation.
About one and half years ago i bought my first home … and currently stand to make a small profit.
The issue is whether to sell now or to hold on .. there are more developments coming up within the region, and the real estate agent is pushing me to sell.. If i don’t sell it will be a good stepping stone to the next property (in terms of having the backing to borrow more?)?
If i do sell then i will be renting again.. The property has appreciated 48% (conservative).. is it better to run while the goings good and look for the next one or to hold and use it as security for the next one?
THANKS
Retain.
Why rent and be at the whim of a landlord, not to mention the hassle of moving twice – once when you move in, then again when the landlord decides it’s time for you to go, not necessarily when it’s convenient for you.
You can always access the equity in your home with a line of credit loan.I agree.
Not just from the point of renting again, but as you said yourself, your property will provide a good stepping stone.
From everyone I’ve spoken to along my way they always say the first property is the hardest one to get. I only have one myself (so far) and it does seem to get easier. By the end of the year I plan to have several more.
You could either use the equity to get into other deals to create a profit.
or
Sell, take profit, rent and some day come up with that deposit again, by which time it will require more.
I’m sure you remember the hassels of trying to save the deposit. Let it be your stepping stone.Phil.
Retain
The realestate agent is only working for himself. You will be able to draw down that equity in the years to come like you had that money sitting in the bank.
In relation to using it to get the next one, try and not cross colaterise. First go to the back and borrow the equity, tell them its for reno. Then you can use this money as the deposit with another loan for the remainder of the new properties purchase price.
Cheers
Surely borrowing money for one purpose (reno), but actually using it for another (deposit) is fraud, and could endanger one’s credit rating?
Peter
Do you have to tell the lender what you will use your equity for? I spoke to my lender about refinancing to gain the use of my equity so I can invest in a few properties and he said it didn’t matter what I planned to do with it.
Cheers,
Mathew.
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