I live in a two bedroom apartment in Sydney near a station and hospital which I own with mortgage of 270k and LOC 170k (100k drawn to buy another interstate investment – house and land package due for completion in november). My PPOR is valued at 540k but there are already comparable sales at $600k within 6 months of valuation. I also have investment in Sydney valued $650k that picked up at least another $50k last 6 months and is 90% geared. My interstate house and land is valued at $400k. Rent on investment is around 5% per annum.
I need to upsize which will cost between 1m to 2m depending on which suburb. My current income is 170-180k/y mix of salary and contractor work but due to hit up to 400k/y from next year as I gain specialist status. I am very keen to upsize asap and even considering option of renting a bigger place whilst income record builds enough to get the house we want.
Question is whether I would sell my PPOR after moving out of it. My PPOR is joint owned with wife who now is full time mum. Any tips on this? My goal over next couple of years is to buy a nice house for the family and settle asap.
Hi Poombar
When was the valuation on your PPOR done? Sydney market moved up quite a lot in the last 12 months.
Are there any reasons why you would want to sell your PPOR? Why not keep it and rent it out?
Andrew
superAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auHow long have you been a contractor for?
One advantage of selling the PPoR that I can think of is it being CGT exempt. But there could be an opportunity cost there if prices continue to rise.
Rent in the area you wish to live in may be a good idea – try before you buy, or just continue to rent and invest in the IP’s as a $2m PPoR wont do any favours for your serviceability if you wish to keep purchasing IPs. Being on a high income (or anyone for that matter) I would assume you would want to give as little to the tax man as possible.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
Valuation has only been done last 3 months. There is a talk of market cooling down but it’s still crazy here!
Main reason why i am considering selling is because of CGT exemption and it’s ownership structure is not ideal as an investment. It is jointly owned with my wife who doesn’t have any income, not ideal when I want to get more loan and negative gear as much as I can to claim tax deductions.
Salary income is still my main source of income. I have done contractor work here and there for 2 years now and accounts for around 10% of my income. At the end of this year salary job will end and it will be mostly contractor income, at least double the rate.
If I end up selling (or not selling and keeping it as IP) and rent PPOR, what should I do with spare cash then? Also I heard people talk about being clear about exit strategy, which I don’t really have with any of the properties I own. When is the time to sell and move on?
Not a bad idea at all….
I sold a ppor of mine and I coukd never look back. The prices have crept up but in return I paid no tax I have pretty much paud off the house im in
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
The exit strategy doesn’t need to involve selling. Personally I would never sell unless I had to.
Would need to know your financial situation in detail to comment. How do you operate as a contractor? Sole trader/company/trust?
It would be best to discuss this with an accountant. One that also knows about property. Most of them don’t.
superAndrew | Property Analyser and Finder Tool
https://property-analyser.com.au
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