Hi everyone
Having just purchased property number 3 (including our PPOR), my wife and I are suffering analysis paralysis. We feel that we need to now offload 1 of the 3 properties to reduce our debt, but seem to be going around in circles in deciding which one.
1. Brisbane unit – est.value $250k (PPOR)
Est. rent $250/wk
Balance of loan $0
2. Mt Pleasant (Mackay) house – est. value $230k
Rent $220/wk
Balance of loan $150k
3. Beaconsfield (Mackay) house – est. value $230k
Est. rent $240/wk
Balance of loan $240kAny advice would be greatly appreciated [confused2]
Cheers
DannadsThey all seem about the same figures. I would probably look at the quality and long term prospects of your tenants and also the house which would probably be up for maintainance sooner (older house)
Which has most depreciation and of course which is the most desirable location for people to live.
[biggrin]
May all your dreams come true. (except for those evil dreams and maybe that dream where you had no pants on in school, oh, and that other dream with the invading martians and the……………)Lifexperience
Do you have an income to support these? If so, and you are still a little worried – fix the interest rates for 5 yrs. You then know what your costs are and sleep well at night knowing these costs will not rise.
If possible keep them. But I know nothing about Mackay. But I assume they are good properties why else would you have bought them.
Hi Dannads,
I am curious as to the reason you bought these properties in the first place and whether or not they are performing as desired – because the answer to these questions will largely determine what you should do.
Looking quickly at the situation.
Your PPOR is fully paid for and as a consequence you have no non-deductible debt in property. So you are well placed from this perspective.Your seond property would be costing you around $1500 and the third property will be costing around $7500 per annum.
Note all figures very ‘rough’ and based on interest only loans for the loan figure quoted and there is no allowance for any depreciation claims that may be available to you.
Is the ‘over committed’ thought largely related to the third property as you indciate that rent is estimated to be $240/week? Does this mean the property is yet to settle or find a tenant?
There are a few steps you can take to improve the cashflow; change a loan or both loans to interest only; apply for a PAYG income tax variation; get a depreciation report done; fix loans as per Yack’s suggestion; revisit your goals to see if they are still current; do the properties still fit this criteria; and/or maybe (if the comment about not yet settled is accurate) you are suffering from typical buyers remorse as completion of one property draws near or a proeprty is untenanted.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Thanks Derek, yack and lifeX.
Property 2 was bought as a rental investment, but we have been fortunate to achieve substantial capital growth.
Property 3 is in the process of settling. Property 3 has been bought for capital gain, which we hope to enhance by adding a 4th bedroom and ensuite. We don’t think these renovations will take us above the market, however we will be above the median house price. Derek, I think we are suffering buyers’ remorse [blush2]
Thanks for the tip on the interest-only loan – this is definitely something we will now consider.
All of our properties are performing as desired (provided we do see capital growth on Property 3.) While we can service the loan and afford to renovate Property 3 at the moment, come June 2005 we hope to be in a situation where we can relocate to Mackay and reduce to one income. We want our investments to replace some of the shortfall in income associated with going from 2 to 1 salaries.
Thanks in advance for all your helpful advice – we really appreciate it.
Cheers
dannadsP.S I can’t believe how quickly Steve’s Brisbane Seminar sold out!! Steve, are there any spare tickets left??[cap]
Cheers
DannadsMackay is booming because of the mining expansion west of Mackay. It appears that it will continue to boom for some time yet as there is a shortage of development land in the mining towns, forcing people into Mackay.
Peter
You have not debt on your home, and the others would not be costing too much after taking into account tax breaks and rent, so why sell? You should be buying more!
Terryw
Discover Home Loans
Mortgage Broker
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You must be logged in to reply to this topic. If you don't have an account, you can register here.
