MY PRINCIPLE PLACE OF RESIDENCE IS WORTH $700000,
WITH $248000 DEBT STILL OWING.VIA AN INHERITANCE, I WILL SHORTLY OWN 1/2 A BRISBANE PROPERTY WORTH
$250000 WITH MY SISTER.AM I BETTER OFF SELLING MY SHARE FOR $125000 AND REDUCING MY MORTGAGE, OR SHOULD MY SISTER AND I KEEP THE PROPERTY FOR A FEW YEARS, PICK UP THE FORECAST 15 – 20% OVER THE NEXT 3 YEARS, AND USE THIS POSITIVE CASHFLOW TO INVEST IN OTHER POSITIVE CASHFLOW PROPERTIES?
TONIA[i cant think – your yelling…….
Either way – do what you can afford and its time in the market that makes successful property investors.
One idea is to keep it, use the rent to pay down the PPOR debt and use the security to borrow against for your cashflow pos properties.
If you sell you will have to meet additional costs.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Tonia,
If you do decide to sell it, you may consider doing so before the 2 year ownership anniversary date (since it was is transferred to you) in which time (if memory serves me correctly) you will be exempted from Capital Gains Tax as it was an inheritance.
Cheers,
Jo
As I said, ‘IF” you decide to sell you MAY consider doing so BEFORE the 2 year anniversary of your/your sister’s ownership, as in that time you will be CGT EXEMPT, if you hold onto it, you will subject to pay CGT if and when you do sell it. Besides, if you sell it before the 2 years, you can use that money to pay off your PPOR which is as The Adviser (and others) mentioned a non-deductible tax burden! Why hold onto it, when (as they suggested) you can sell, and pay off the home you are in??
Me personally, I wouldn’t sell, simply because (as the others again have highlighted) you can funnel all income back into your non-deductible tax property, but you need to sit down and work out, which option would save you the greatest amount of money. IMO I really hate that four-letter word “SELL” but then again, I realise that at times, selling is the more sensible and financially viable approach!
At the end of the day, it is all about your personal choice.
Cheers,
Jo
Each of my properties is borrowed against the other- no big deal for me. Tenants are not the only thing one has to rely on when investing. Use your income from work to pay off the debts too. Being “rent-reliant” is risky, cross-collaterisation is far less so.
kay henry
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