Hi There – first time using a forum to get insight and understanding on property. My usual go to was dad but his knowledge is simple and very old school…great, but heard the same thing over and over. Never sell, always hold, no matter what.
My situation: Have an IP which was my PPOR, which is positively geared but only has a ROI of 6.75%. Currently living at my parents with my wife while we build our new PPOR.
My conundrum: Do I sell my IP, which I believe has a decent amount of CG, use the CG to pay down my bad debt on our new PPOR and then save and reinvest.
My goal: To pay down my bad debt as quick as I can. Plan is to reinvest where I can possible subdivide and flip quick to gain a quick cash gain until my PPOR is paid off, Then look for long term +CF properties.Alternatively, just use the the CG of my IP to purchase second IP.
Any feedback would be greatly appreciated.
Hi Jason,
I took your post out of the other thread, just so any replies to you don’t get confused with replies to “jcross”. I’ve got a few thoughts for you, but first I wanted to let you know what just happened !! I’ll be back !!If you have an idea for a better title, let me know in a reply and I will adjust it.
Benny
Hi again Jason,
You seem to be in a rather good situation that can allow you a few choices – all thanks to already owning a PPOR. There is quite a wealth of information at this early level, and I wanted to suggest you take a look at this thread first :-https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/
There were several titles and subjects in there, and I am sure a number of them would have piqued your interest. Your next move might be to discuss your situation with a suitable adviser (you’ll find a few on here) who can guide you toward where it is you wish to go.
There are also plenty on here who just love to help new starters and to point them in the right direction – whether advisers or not, there are many who “have a pretty good idea” of which way is up !!
Feel free to ask more as your questions force your brain further down the property investing path !! :p
Benny
Hi Jason
It depends on plenty of things.
If the interest you will pay on your “bad debt” is equal to the stamp duty and buying costs you spent on buying your IP (plus the capital gains tax to pay on offloading it), then there is probably very little point in selling it. Have you taken a look at figures like that?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Firstly, thank you Benny for steering me in the right direction (I’m such a newbie). The Minimogul post was definitely worth a read. I agree with Mini, and it’s reassuring to hear that you can always make a profit in a familiar market as long as you’re okay with using a different approach to make that happen.
Ultimately, like JacM pointed out (thank you for your response) number crunching is the key…which I haven’t really done yet. My knowledge of the associated costs, expenses, taxes..etc is quite limited. Would either of you know of any good resources, templates or guides I could download or buy that detail the above?
I’ am seeing my accountant tomorrow and will probable approach an adviser before I make any decision.Thanks
Hi Jason,
My knowledge of the associated costs, expenses, taxes..etc is quite limited. Would either of you know of any good resources, templates or guides I could download or buy that detail the above?
Steve’s books tend to include a number of examples of “numbers”, quite easily readable and understandable. Great for the new investor.
Another who provides lots of “numbers” is Jan Somers – her books have pages of “growth over the years” examples, showing how your next 10 to 20 years of investing might proceed – just replace her numbers with your own, using her examples as templates.
If you are familiar with spreadsheets, have a crack at making your own. I found for me that doing so had me learn so much more and grew my confidence prior to buying my first IP, followed by the second just 2 weeks later (my spreadsheet had convinced me that buying 2 or more was preferable to “just one”). It was right :p
Do check out the Articles in the Training Centre on here too. They are setup to provide a path that can be trod to learn quickly and to stay largely “out of trouble”,
Benny
Thanks Benny, I already have one of Steve’s books (which was an eye opener), and I will definitely have a read of Jan Somers.
I agree, spread sheets are crucial and I need to set one up….numbers don’t lie.
Really appreciate the advice my confidence like anything at the beginning is a little low but once I do my due diligence I’m sure like a lot of the investors out there it will all become second nature…I hope :-)
I’m off to Steve’s conference tonight, really looking forward to it, hope to see you there and have a chat.Jason
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