All Topics / Help Needed! / MY SCENARIO!!! WHAT WOULD YOU DO?

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  • Profile photo of markus 78markus 78
    Member
    @markus-78
    Join Date: 2007
    Post Count: 1

    Im new to this forum but have read a few posts here, quite interesting.

    Ive got a scenario i wish to get advice from

    I have my own property in which i owe 100k on and i have another property that i have just finished subdividing with my father, in which it owes me 350k for my block (we done a 2 lot subdivision) and i could possibly sell it for 650k , so if i sell i could pay the house off and have 200k in bank,

    if i keep it ill have a total 450k debt and probably have to pay interest of about 30k a yr (i only get 150 a week from rent on that property, its only a granny flat)

    i do speccies and thats how i make my money, building spec homes, and that was the first subdivision, quite lucrative, i would recommend subdividing to anyone

    any other time i would ust sell and take the profits, but its in a good area that got not much supply and heavy demand, BUT

    im trying to work out if it will achieve a capital gain of at least 30k a yr , plus if i had the 200k in bank i could make money on that or use it to do another speccie

    im very cautious with interest rates at the moment and i dont want to have to much on the go and leave myself exposed.

    im trying to work out if this is a property to hold on to, could be good capital gains in the future

    so…… here it is in short

    PPOR WORTH 450K OWE 100K
    INVESTMENT PROP WORTH 650K OWE 350K RENT 150WK

    doing the numbers it would have to go up at least 40k a yr to make it worthwhile. could anyone see that happening

    id love to hear your thoughts,

    markus

    Profile photo of kellylockkellylock
    Member
    @kellylock
    Join Date: 2007
    Post Count: 60

    I’m a little confused…

    You have a granny flat that could sell for 650K?!

    It is hard to know about capital gains, because some areas of Aus are going down or sideways with their growth, but others are going up (in mining areas etc…). I imagine it may depend on the area and maybe also whether your property is a median house or the up-end of the market in the city/suburb/town where it is.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    You also need to take into account the selling costs such as CGT and exit fees, agents fees and solicitor fees etc.

    Maybe it might be worthwhile to sell, pay off the home loan and then do another project. But you could also do something else, possibly, even if you held onto it.

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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