Need your advice my fellow PI's.
I'm assessing my properties value and the current financial market and would like your advice if i should sell?
Here are the details:
It's my one and only property.
It's a 2 bed apartment in inner west of sydney.
The rent i get is 66% of the weekly loan repayment.This alone would ring alarm bells, but is it better to keep property and get a fixed interest rate on loan or sell and convert equity to cash?
And do you see prices of housing dropping if iterest rates rise?
Your input is appreciated.
Hi pgebara,
It depends on how much equity you have in the property? You need to consider selling costs and CGT if you were to sell.
What do you intend to do with the cash after you sell? Assuming you will use it for further investing, I don't think you need to sell the property. Maybe look at drawing the equity out from your property and use that for further investing. You now have access to the cash tax-free. This will increase the negative gearing on the current property but if you can invest the equity in investments that return >15-20%, you should be okay.Thanks propertypower, i appreciate your input.
I have about 30% equity in the property.
If you are looking long term, and have been happy to fund the difference with the neg gearing, it makes sense to hang on to it – as you have obviously done the 'hard yards' and bought it in the first place. If you do hang onto it, and are looking long term, once you have finished reading this run out and find a good fixed interest loan for a few years! All the best. (PS. Make sure it is one you can pay a bit extra off too – some lenders still do not offer this flexibility, and who knows what you may need down the track)
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