Hi,
This is our first post. We've been reading, with great interest, all of your posts for months now, have read a few books and are starting to make some plans to invest… Yes, we're very much in the early stages
JodieD,
My thoughts are to avoid selling at all costs unless the property is a real dog. After all the purpose is, I would have thought, to develop a portfolio of property which you can't do if you sell. To develop a portfolio usually means taking on more debt so you need to get your head around that concept first. Enlist the help of a good broker from this forum to guide you through the process and give you suggestions to manage the holding costs.
All the best,
PudHello Jodie
Why not consider renting out your home and making this your first IP. You can do this for up to 6 years without losing its CGT free status which is a big plus.
You then get to deduct all expenses (rates, water service, insurance etc. and most importantly the interest on the loan) from your tax which should leave you better off. Also, if it's a fairly new house you should have some good depreciation which is great as this is a non out of pocket expense.
Selling this house to buy something else costs money (selling costs and then buying costs and stamp duty) so unless your house is in a poor growth area it makes better sense to me to keep it. Mind you I don't know the value of the house or the size of your loan.
Could you sell the house and buy 2 good IPs without increasing your current debt level?
Just another thing to consider.
Elka
Thanks Pud & Elka for your replies,
I hadn't considered renting our home… It possibly wouldn't allow us to increase our debt levels immediately to start investing -however, we would have created our first IPGenerally speaking, I don't see the point of selling a property in Australian suburbia as there is plenty of years of 'heat' left in the market, if you have a global view of relative property values. You simply use the available equity in your home to buy more property. Buy more property when the properties you own have gone up in vaue & you use the new level of available equity to buy more.
Selling involves costs.The only situations I can see for selling property is for:
1) cash flow
2) you can see somewhere else where you are fairly sure you can get a greater return in a shorter period of time, AFTER TAKING INTO CONSIDERATION SELLING COSTS OF EXISTING PROPERTY & THEN BUYING COSTS OF THE NEW PROPERTY. Its basically a form of opportunity cost
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