Hi My name is Trisha and I am relatively new to the investing game. I have paid off my house and currently have a negative geared property, which I believe is NOT working for me. I am thinking of selling this and buying two lower priced cashflow rentals, or one holiday rental? Or should I hang on to it?
Hopefully some seasoned investor can give me some tips and hints and get me on the road to financial freedom![cool4]I have had mixed responses to this and would like to say that I am inclined to go for a cashflow rather than paying money into a property out of my own pocket, as the rent I am getting does not cover the repayments, plus my initial outlay was high, any more ideas will be welcome!
Hi Trish,
IMO you are in an excellent position by owning your house “outright” that in itself is a huge achievement!!!
And to trade the negative geared property for 2 x cashflow properties (which can turn to neg gear in a heartbeat anyway) or in exchange for a “holiday rental” is IMO foolish; UNLESS it (your neg geared IP) is performing REALLY badly. But then, because you have no current debt, any cashflow positive income will be added and taxed along with your wages/salary (assuming you work).
At the end of the day, it depends on how badly the neg geared property is doing (how much out of pocket you are), it’s long term CG potential and how long you have owned it (if < a year, you are looking down the barrel of 100% CGT bill).
My 2c……Keep it, and don’t get scared by the “doom and gloom” and/or “cashflow is king” crap; positive can turn negative before your very eyes!!!!
Cheers,
Jo
If its a quality property keep it, even if there is some short term pain. In the long term quality properties are better than rural cheaper ve+ properties.
Read under the Guru Forum – Peter Spann. I invest his way.
Hey Trish,
assess what your long-term goal is. Once you do this, you will see which option is better for you – to buy a few -ve geared properties or buy many +CF properties. each person is different.
However, in your case, if you don’t want the financial burden of contributing towards the repayments of the loan, then you’d be better off selling it and using those funds as the deposits for other properties – u seem interested in NZ from your other posts – if i was you, Id go for it. Try to head down there and check it out first for yourself.
Kind Regards,
George.I’ve found a way to help you save and earn whilst not selling or delivering any product. If interested, drop me an email or PM me to find out how
Hi Trish, I am only new too but have 9 poperties so learning fast. Here is my opinion any way. First dont rush into selling your first rental, unlock the equity in your paid off home and start buying positive cash flow properties.
forget NZ at this stage as there are still oportunities here in Australia as NZ will have many more issues that you just dont need till you learn a whole lot more about positive cashflow properties.
Originally posted by tigercjn:forget NZ at this stage as there are still oportunities here in Australia as NZ will have many more issues that you just dont need till you learn a whole lot more about positive cashflow properties.
This is a valid point if you don’t have someone assisting you but if you have great like-minded investors who know NZ back to front assisting you, then I believe you should be fine. Some great people to assist are those I mentioned in your other post.
Warm Regards,
George.I’ve found a way to help you save and earn whilst not selling or delivering any product. If interested, drop me an email or PM me to find out how
Hi Trish,
you mentioned in your postcurrently have a negative geared property, which I believe is NOT working for me..
Could you expand why you feel the property is not working. Maybe your expectations are not aligned with a negatively geared investment.[blush2]
In my opinion (without knowing the full facts and your investor profile), I would hold onto the negatively geared property, provided it has the potential to show substantial capital gain. Something else you should consider — the entry and exit costs associated with property are steep[angry2] and should be factored into any decision to sell one property and buy an alternative.
Hope this helps.[blink]
Regards,
Helen
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