Hi, I have a house which is in 3 flats in an inner city location of Auckland, with Harbour views. Very sought after and valuable Real Estate, which I have owned since 1983. It only has a return of about 3.5%. Looks like the property market in Auckland may level off at some point after a lengthy growth period. It is cash flow positive, and I do not have other investment properties. The question is how sensible is it to keep this property, and perhaps look for other properties with better returns as adjuncts to my portfolio? Alternatively, would it be better to follow Steves divide to multiply theory and unleash a whole heap of equity to invest in more average areas? Thanks for your opinions, Mark
I am not an expert BUT! Personally I would look at ways of keeping that particular property because it sounds like a jewel in your crown so to speak. Have a chat with your lender about releasing equity through line of credit facility or the like. You can then still buy more property and keep this great located property.
Cheers
Leigh KThanks Leigh, that’s kinda what I’ve been thinking. But I keep being offered advice from accountants’ and other property oriented people who say you’re not able to depreciate as much on that existing investment as you could on a newly purchased property and the return is really low. Also Steve’s theory of selling to buy more property is compelling. This property, is however unlikely to fall much in value and the growth on that location is assured. Only hindsight can really tell you what to do!! Anyone else got any thoughts? Thanks in advance.
markHow much equity do you have in the property..why not keep the property ‘and’ invest as well?
Maybe post some info on your situation so the brokers here can give you some feedback
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