All Topics / Help Needed! / Keep Investment or Sell to buy family home?? Please help!!

Viewing 9 posts - 1 through 9 (of 9 total)
  • Profile photo of shel25shel25
    Member
    @shel25
    Join Date: 2007
    Post Count: 23
    October 5, 2010 - 12:19 pm

    Hi, i have an investment property in Adelaide whereby I have excellent tenants, it is only JUST negatively geared. I earn $335/wk in rent. The house is estimated to sell for around $410k – I owe $220k.

    I am pregnant, and live in Qld. We really want to buy a family home in Brisbane to live in, however we will soon be on one wage of $1k per week , and figure we can't afford much more than a $420k loan! I cant find any houses i like under $550k!
    I love my investment property, it basically pays for itself, and I have had it for about 10years now..
    Would it be wise to sell it, and make say $150k profit (after fees and capital gains tax?) and put this money towards a family home in Brisbane??

    Or should I hold onto it and settle for a cheaper house in Brisbane which we can currently afford?

    Any advice is appreciated! I want a nice house, but don't want to regret the sale of my beloved investment!

    Thank you SO so much..

    Shelley

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    October 5, 2010 - 8:26 pm

    It might be better to sell. I suggest you do the sums and see.

    Buying a PPOR will also enable you to use the CGT exemption too as well as not having to pay increasing rents.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of crjcrj
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    @crj
    Join Date: 2004
    Post Count: 618
    October 6, 2010 - 9:31 am

    How do you calculate being able to afford to pay a $420K loan on $1000 per week even if interest only

    Profile photo of shel25shel25
    Member
    @shel25
    Join Date: 2007
    Post Count: 23
    October 6, 2010 - 10:05 am

    Thanks for the comments.

    We mean, buying a house for $420k and keeping the adelaide house which pays for itself.
    On a $1k wage we should be able to afford repayments of $630/wk based on a 30yr loan term.. ?

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    October 6, 2010 - 10:52 am

    Hi Shel

    Could be a stretch – could you live off the remaining $370 per week?

    Have you considered renting? That way you might be able to live in the place/area you desire and still keep your Adelaide IP.

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    October 6, 2010 - 11:18 am

    Have you considered a Shared Equity Loan?

    Fairly strict criteria but excellent option for the right client.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of juggling investorjuggling investor
    Member
    @juggling-investor
    Join Date: 2010
    Post Count: 2
    October 7, 2010 - 2:10 am

    I am also debating of selling my existing home as its getting a bit small to buy a larger one …love to keeep it as all my kids memories are in it…If  I was to rent it ..my tax agent said the rental income would be considered as income
    Lost of what to do…what would be the best option ….????
    Thaaannnkkk   yoooouuu 

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    October 7, 2010 - 2:14 am
    juggling investor wrote:
    I am also debating of selling my existing home as its getting a bit small to buy a larger one …love to keeep it as all my kids memories are in it…If  I was to rent it ..my tax agent said the rental income would be considered as income
    Lost of what to do…what would be the best option ….????
    Thaaannnkkk   yoooouuu 

    Mate, that is like asking what should i have for dinner.

    So much would depend on the figures and your situation it would be impossible for anyone to answer. I would suggest to sit down and do figures for selling and for keeping and see how the compare. Then reassess after that.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of MagnetMagnet
    Member
    @magnet
    Join Date: 2003
    Post Count: 6
    October 7, 2010 - 4:33 am

    Hi Shel,

    It all comes down to numbers and your personal preference. There are 3 options from what I can see

    1. Keep your investment property – refinance to tap into the equity and buy your own home. All depends on whether you can afford to do that. Do the numbers.
    2. Rent in Brisbane and keep your investment property – especially if you believe you are going to get good growth with your investment property. Plus renting could be cheaper
    3. Sell your investment property, realise your gain (and give up any future capital gain) and buy your own home.

    It all comes down to your cash flow – your income and your expenses. You seem to have a pretty good handle on that so it's a case of balancing the emotional decision of wanting your own home now vs the prospect of doing what will give you the best capital growth for the future.

    Cheers,

    Magnet

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