4brm investment property i am renting out in collinsville – which i am selling – BUT may hang on to depending on feedback i get.
This towm is in the middle of the bowen basin mining boom – the new mine starting there and the 10milliondollar upgrade to the has started a bit of a boom there . in the JULY API MAGAZINE it featured collinsville. ive already gained from the growth of th last 12 months and my local agent there advised it would list for $325k with long term and reliable tenenats now paying $350/week!! .. who expect rents to rise again anyway. Does anyone has experience in mining towns before – do you think should i still get out now or hang on.
CHEERS
Why are you going to sell? You will pay tax on 50% of the cap gain at your marginal tax rate if you sell it after holding it for 12 months.
What will you do with the profit?
If the property is cashflow positive, or even slightly neg cashflow, and you've made a decent cap gain, I would be holding it. The resource boom has a way to go most people believe, and even if it stalls, the properties have gone up enough to carry a drop in price and still give you a decent profit.
i am selling cos i was going to use the profit in another property probably in south east qld area for the long term – conveyancing and selling costs considered still !!
cheers – thanks for response marc
i'd be hanging on, there has been good growth in the area, can't you just use the equity to start you off on the next project. I've just bought in the area, and once again its tipped for over 20% growth because of the growth in the mining industry in the area. I'm buying again, and again in the new year…. such a shortage of accommodation in the area, you'll never lack for a tenant.
In my veiw the Bowen Basin is hot. You wont get 30% growth in Brisbane again. I wouldnt sell if i was in the market. Id use the equity to purchase a cheaper place in SE QLD growth coridor. I am trying to consider myself wether to invest up there or buy in SE QLD. My Concern is i have missed the boat. 18months ago I had the oppertunity to buy a 1/2 acre block on the beach at Horse Shoe for 460k. I didnt and now im kicking myslef. (I prefered house and land investment) Just comming back to the market now, it would be worth over 650k, maybe more. Some are going for a mill down there!
Would you invest in Bowen itself or Elswhere? I consdider Mackay to be a safer invetment?Any recomendations?
Thanks
Rickpete7 wrote:i am selling cos i was going to use the profit in another property probably in south east qld area for the long term – conveyancing and selling costs considered still !!cheers – thanks for response marc
Why not use the equity in your current property for the deposits and purchase costs on the next one, then you have 2 properties under your belt, accumulating cap gain.
Your loan on the next IP will be higher as you are using all borrowed funds to purchase it, but if you select areas with decent rent returns, good on-paper deductions and add-value potential, then you can minimise any neg cashflow to a manageble level.
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