Hi there,
I have been reading through previous forums on similar topics, but seek some advice on our particular circumstance please!
We have a 5 year old property which has been our PPOR and are looking at moving interstate for higher income & hoping to start property investing. We are having difficulty deciding whether to keep our PPOR as IP, or sell up and invest in more lucrative properties. Initially we would like to rent a property interstate, as we are uncertain on of the move and property in that area.
We owe $326k on our PPOR which has been valued at $420k, and we should be able to get around $350/wk rent – this equates to a monthly mortgage payment of $2400/mth with a potential of $1400/mth income. It has shown 6% growth last year which is expected to increase to 10% next yr.
While it is in a good growth area, it wasnt purchased with the intention to rent it, so it is not an 'ideal' IP – iut has polished wood floorboards, elaborate gardens and an 'interesting' design, it also has some emotional attachment.
Should we sell and reinvest with $90k profit? Or keep & work towards reinvesting?
Cheers
CashyHi,
Congrats on the move. I'd be inclined to hang on to what you've got, rather than sell and buy elsewhere – the changeover costs are too great and would eat too much of your equity, when you're already sitting on something that's a valuable nest egg. Sunshine Coast is a great spot with plenty of potential. If the extra $1000 a month in repayments (different between rental income and mortgage payment) is a worry, look into getting a line of credit which is there solely for the purpose of helping to meet the extra monthly payment. While this increases the size of your loan, the increasing capital gain will more than cover the amount of that loan in time. The downside is that you will lose some of your rental income in agents fees, etc. But you'll do that with any investment property.The property is also still there for you to go back to if you decide that the interstate move isn't your thing.
I guess the other really important question is can you stand to see someone else living in 'your' home and maybe not treating it with the love and care that you've put into it. If the emotional stress of that is too great, then sell and move on and wear the associated costs.
Just my two cents worth – I'm not a financial planner. Have a chat with your accountant about the options. Good luck with everything.
Hey,
I am from the Sunshine Coast as well i have a highset 12 year old IP in Caloundra it's a basic 3 bedroom 1 bathroom double garage home that rents for $350 and will increase at the next lease renewal. i work in a real estate in Caloundra and we don't have anything on the books for under $360 at the moment. Being 5 years old i am assuming its in one of the estates? what area are you in? you could get more than $350!
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