Hi All,
I am also a new person to this forum after being referred to read Steve's story. I would like to inquire where I can obtain some advise.
We have 1 investment property (cost $ 750k) and is costing us $17k extra in payments every year (after rental income and expenses). The benefit?? is that we have already paid $200k off and it has gone up $100k last 18mths. Therefore, we have approx $300k in equity, but a debt of $550k. We have no other debts. The property is in a high growth area with golf course frontage.
We also own a cash positive property in Central America (approx $150k in value – debt free).
Should we sell this property and use the equity to buy 1 or 2 others or keep what we have and pay it off? We will have this paid off by Jan 2013.
We work o/s and salary is tax free??
Regards
Why would you sell it if it is in a high growth area and you'll have it paid off in 3 years?
Be aware by the way that once it is cash flow positive, you'll have to pay tax at 30c in every dollar, because you are not currently Australian resident for tax purposes. So your investment income will be taxed in this manner. It'd be about that time to either cop the tax on the chin, or buy an additional property to offset it.
If you haven't got one, you'd do well to get an offset account against your mortgage and put all extra cash in there instead of straight onto the mortgage. It'll be easier to pull the money out if you need to (eg for a deposit on an additional property).
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
JACM
Thanks for the reply.
What we are wondering is if we would be better off selling it now and buying others that are Cash Positive. We would use the $300k in equity to buy 1 or 2 properties ($150 – $200K) that would return cash immediately through rental.
With this, then buy 1/year (we could put down a large deposit) by the time we would have paid the original one, we could have several income producing properties.
Regards
Selling may expose you to capital gains tax, buying one or 2 others will mean paying stamp duty. Consider refinancing to buy one or 2 other cheapies which are cf+ which will assist in your overall portfolio balance.
Don't sell mate. Not necessary. You'll have to pay Capital Gains Tax, solicitors fees….
Why don't you just either use the equity in it as deposit for additional properties, or refinance the loan on it to free up cash for additional properties?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi Raslaffin if you sell what are you hoping to gain? It’s cash from the equity right? Then your up for all the costs associated with selling so you loose a whole chunk of money in the process, real estate agent fees, if an investment property then capital gains tax etc etc. Not only is it costly to sell you LOOSE THE GOOSE THATS LAYING YOUR GOLDEN EGGS!! You loose a valuable asset that will most likely return you on average anywhere from 7 to 12% if history repeats itself.
If you access the cash out through well structured finance (and I need to make that clear WELL STRUCTURED FINANCE) you can pull out the required equity and have it sitting in a bank account interest free and tax free.. until you draw it down. Then you pay interest only on the amount you draw down. This money is cheaper than selling and as I said theres no tax involved as its a debt in essence.
Use this as a deposit and costs for your next purchase and increase the size of your asset… then you are setting yourself up for creating for yourself significant wealth with property (I had to throw that in) due to the size of your asset generating capital growth.
Check out one of the other forums regarding multi property structuring as well.
Regards
Tony Born
Senior Mortgage Consultant
[email protected]
0407 617 141
Ask me about a free property Investor ToolkitAwesome deal pending. I think for a successful business, locations play an important role. Thanks for posting, just i want to confirm about that deal. Is that open still?
Hi there, Check out our website – http://www.multiplepropertyservices.com.au.
We don't tell you what we think you should do nor do we try to sell you house and land packages, off the plan apartments, books, CDs etc!
We work with you – and your own circumstances to help you achieve the goals and dreams you have, using property as the vehicle! We provide ONE ON ONE coaching – not sitting in a room with 100s of others and only giving you half of the story/skills etc.. We work out your goals and objectives, the timeframe you want to acheive it in and then start working through structures, finance, different strategies, asset protection etc.
I too have many postively geared properties – some stand alone tenancy, some dual occupancy, some units.. I have and also assisted my clients through property reno's/flips, add value – buy and holds, options, developments (I just helped one of my clients through their first development which is going to provide them a minimum return of over $300,000!)
We have also done JV's between clients as well. We also have experience in buying property through their self managed super funds..
There is no wrong strategy or venture you just need to ensure that you are fully informed and aware of the pros and cons of each – continually referring back to your goals to ensure that each step or decision you make gets you closer to achieving your goals! Its also beneficial to have someone there to call upon to help, support and motivate you to make your dreams a reality!
Would be happy to catch up if you would like to discuss further, you can email me at [email protected]
Take care and best wishes on your property journey!
Hi Raslaffan
With a handle like that, I'd guess you're in Qatar (spent 8 years there myself). I'd use the equity you have in your IP to purchase a couple of CF+ properties to help speed up the purchase of the IP. I'd definitely wouldn't sell it at this point because as a non resident for tax purposes, a sale now would attract way too much tax (as previously mentioned above).
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Certainly do not sell merely for selling sake.
As Paul has mentioned utilise the equity to acquire a couple of positive cash flow properties and offset one against the other.
Have a look at wrapping for a way to get straight into the positive cash flow market.
I have lectured at many an investment conference on wrapping and positive geared strategies so understand why investors are keen to balance their portoflio. Dont let the fact that you are overseas detract you from looking to grow your portfolio
Richard Taylor | Australia's leading private lender
Hi all,
How would you feel if the bank of your choice paid you for your business to them? and you got to deal directly with that bank for the whole loan process.
Money for Jam gives 75% of the referral monies back to the client. That's $300 per $100k loan
Check it outHello Raslaffan,
The numbers at this stage are not leaning towards 'selling' considertions
Cost: $17k per year
Gain: approx $65k per year
Return in Capital growth; approx 11%
Return on investment (ROI): approx 25%sounds like it is working. However can you continue / afford the $17k per year. If not SELL!
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