All Topics / Help Needed! / Help would be really appreciated

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  • Profile photo of ls_greigls_greig
    Member
    @ls_greig
    Join Date: 2006
    Post Count: 3
    May 23, 2006 - 10:10 am

    HI
    I have just recently split from my partner(defacto). We have a property together that we currently live in, a 4X2 villa in East Vic PArk, WA. It has a huge mortgage on it unfortunately. I would like to keep the property to live in and buy him out, which is not much. This was purchased just 12 months ago.

    I also have an investment property, a 3×1 Villa in Victoria Park, WA, that I purchased in 2003. It is currently rented. He has two investment properties purchased in 2003 and 2004 but he does not want to purchase the joint property. We have contributed jointly only to the joint property, our investments have been financed individually.

    All properties are within 6klm radius to Perth CBD.

    I really dont want to sell the rental property, but i think the 4×2 will be better off to keep in the long run. I have worked out my finances and would struggle to keep both. I earn an excellent wage, but it would not leave me anything to live, just sit and admire my two properties.

    Im looking for creative advice on any way to keep both properties(renting both out wont help) or should I just sell my rental and start again?? ;-( I would have good equity in the home property once
    the rental was sold as the rental property has increased in value alot(even paying CGT).

    My fianancial advisor thinks i could probably scrape through and get finance, but she thinks I would be crazy and should sell the rental and then look at investment opportunities again once I get through this mess.

    Any ideas greatly appreciated, or words of encouragement to sell the 3×1 and keep the 4×2 and start fresh. I just hate feeling like I might be going backwards…but perhaps I must do this to get ahead anyway….
    Thanks
    L

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    May 23, 2006 - 11:00 am

    If you are going to struggle, it may be better to sell a property.

    If your loans are PI, changng them all to IO may be possible and this may help your cashflow.

    Perth seems to be the only place growing at the moment, so it may be better to keep a bit longer if you can afford to do so.

    Terryw
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    Profile photo of peejay121764peejay121764
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    @peejay121764
    Join Date: 2003
    Post Count: 22
    May 23, 2006 - 6:55 pm

    Little fish are sweet.. or to put it a different way 50% of something is better than 100% of nothing. Without providing specific advice and I think that the Interest only option is a good one,,I would look at the big picture. Just having those properties in WA at the moment is a great appreciating asset…but.. is the capital gain over the nex few years really going to be as good as the last ? Probably not. Dont be frightened to let one of them go to get peace of mind. You have picked a great location at a great time. The old saying of “Life by the slice is nice” is appropriate. Take one problem at a time, you will still have a good job, still have property, and if you do have to sell, you will have done so at an excellent time and have locked in some profits. Dont forget that sometimes even a champion boxer has to take a step back, and sometimes its the step that enables him to make the knock-out punch. Keep going; you’re doing well !
    Peter.

    Profile photo of ls_greigls_greig
    Member
    @ls_greig
    Join Date: 2006
    Post Count: 3
    May 23, 2006 - 10:57 pm

    Hi
    Thanks for your replies. We did look at the interest only option. Still would be a little tight if any emergencies come up (believe it or not i have just spent $10,000 on my dog! Yep! [wacko]). We also looked at my sister buying in to the rental, but timing and other issues are not working with us, although I will have a better picture of that option today.

    I do feel like the boxer who is about to have the wind knocked out, but Peter everything you say is right. Now is a great time to sell, I will still have one property in a good location and will have good equity in it. My job will allow me to get ahead again quickly and all of this is made me more motivated than ever before! There are lots of positives to it.

    Unfortunately due to the circumstances I dont have a choice but to move quickly rather than wait a little longer. But that is ok, I have definitely done well with the rental in 3 years and the future is brighter than ever before! Thanks for your advice. Much appreciated.
    Lisa

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