Hi All,
I need some advice. I have two investment properties. One I've had for a while and has done well for me, it will be coming off the fixed rate by the start of next year. The other which I purchased about 1.5 years ago has been a torn in my side. I split the loan into two. One fixed, the other variable. At purchase of the property I had the fixed rate at 7.15% for 3 years, and then later on fixed the other at 8% for 3 years. I was thinking of selling the property because its taking more income from my pocket and am heavily negatively geared. That said if I sell the property there is a big chance I'll make a loss, plus have to pay 20K in breaking costs. If I don't sell I'm concerned that I have my income locked into this property and I will miss out on good opportunites coming up, at a lower interest rate….hence potential of positive cashflow.
What do you guys think?
A little bit hard to add value to your question without knowing whether you will have any capital left after taking a $20k hit on break fees and an unquantified capital loss on the sale of the property.
A little bit hard to add value to your question without knowing whether you will have any capital left after taking a $20k hit on break fees and an unquantified capital loss on the sale of the property.
Yeah…its not an easy question to answer. This is my second property and I'm not sure how to deal with this investment…but thanks for your response.
safmoe wrote:That said if I sell the property there is a big chance I'll make a loss, plus have to pay 20K in breaking costs. If I don't sell I'm concerned that I have my income locked into this property and I will miss out on good opportunites coming up, at a lower interest rate….hence potential of positive cashflow.What do you guys think?
What income are you referring to? It seems to me it is a question of how much you are willing to loose. Sell now and loose 'X' or sell later and loose 'Y'
One scenario.
Sell as a 'Rent to Buy'
Structure your contract to give yourself a decent up front deposit and the payments to cover your own. The weekly payments will be higher than rent but on a 'Rent to Buy' contract that is quite acceptable. Do not get greedy! Just cover your own costs. Talk to a lawyer.
Just a thought.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
