All Topics / Help Needed! / buy or sell?
I tried posting this before – I don’t think it worked though.
My situation is: I have 2 neg geared properties.
a) 2 years old 3br dlug loan= 179K, rent = 225 (scheduled to go up to $230) After tax costs me $150 per month.b) 25 years old 2BR unit in gladstone, loan = $79K, rent = $135. Needs work. Costs $200 per month.
I am thinking of painting and carpet to unit, and then sell?
If anyone can give any pointers I’d appreciate it.
Cheers alwayscurious
Hey alwayscurious,
On face value I can’t understand how the 25 y/o unit is costing you $200 p/m (unless you’re paying way high interest..??) It should be creating + cash flow, in which case I would NOT be selling it.. Whether to renovate would be a decision based on if it would increase the rent, increase your deductions or to keep your tenant happy (or all three..)
Are your figures re loan and rent correct?
Cheers,
Theloanarranger
theloanarranger
Thanks loanarranger.
Here’s the breakdown of 2BR unit.Annual
Loan repayments: 5676 (P&I at intro rate)
Water : 100
Rates 1300
Maintenance : 500
Body Corp : 1000
Insurance : 200 (contents only, unit.)
Let fee 148.5 (1 week + gst)
Total costs 8924.5Income 50 wks@135 – 8.3% mgment fee
6750
Total -2174.5 per annum
Per month -181.This is in my wife’s name and she does not earn a recognised income so there is minimal tax advantages.
We made the mistake of beleiving the agent who convinced us that 150-160 per week on a 2br unit was reasonable. It may have been – however the market was flooded with rental units shortly after and still is. [angry2]
Any ideas?
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