I have a property that i am not sure whether to sell. I bought the 4 bed house in 2002 and have borrowed against this to fund my lifestyle over the past 5 years. I bought it for $160k and will sell for probably $270k. I owe $220k on this property. Should i sell to free up some cash to re-invest or re-rent the property? Your advice would be really appreciated. p.s. i will be needing somewhere to rent/buy in Sep 07 when i get married.[eh]
I bought the 4 bed house in 2002 and have borrowed against this to fund my lifestyle over the past 5 yearsThat’s a pretty expensive way to fund a lifestyle!
I assume you’ve been living in this property as your PPOR? If you “re-rent” it, do you have somewhere else to live? “Re-rent” implies that it has been rented previously? These factors are important because you might owe capital gains tax for the time it was rented.
Final question – why would you sell it if you’re going to need to buy again in 6 months? The costs associated with buying (stamp duty, legals etc) can be huge.
Sorry I don’t have an answer for you, but thinking about some of these things might help you choose your own path.
Cheers, F. [cowboy2]
The property isn’t my PPOR as it is too far from where i work. I have been renting elsewhere the last couple of years. The property has been rented for most of the time except when its been unrented and up for sale which it has been for over 7 months. I realise this is too long for it to be for sale but i have had some issues with real estate agents. I have one other property which should be positively geared in the next few months, same location.
My aim is to buy, renovate and sell property in order to make a gradual profit to eventually afford a nice home with ultimately a few positively geared assets behind me. I guess i would like to know also if it is better to rent in the meantime to free up $ while i look for properties to buy then renovate & sell?[hmmm]For sure, renting will free up cashflow in most parts of the country, given that rental yields are so low. If I only had 2 choices – rent and buy an IP / buy a ppor and no IP, I’d choose the former.
As for selling the IP in question, have you considered how much money you’ll clear at sale? Factor in all costs, especially capital gains tax.
F. [cowboy2]
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