Hi All.
I purchased a house 10 years ago as a PPOR, then after 4 years turned it into an IP.
Purchased 10 years ago for 245K, Borrowed 205K
If sold today it would sell for about 310K.Interest Only loan, No principle has been paid off.
I have paid about 95K interest over the 10 years.
Current rent $320 a week.
The current suburb has an annual growth of 1.1% pa
What should I do with this? How long should a property stay negative geared for?
Should i sell it or just let it sit as it does not affect me in any way?
thanks all and appreciate any advice given.
Craig
Is there a reason why there’s not been much CG in the past? Is there or will there be anything happening in that suburb to help with future capital growth? Any infrastructure investments or developments?
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.
I bought the property at the tail end of a property boom in the area, also the house was in an older area as at the time, just around the corner a brand new estate was being established.
This older area has a slower CG than the newer area
There is good infrastructure around, train station, buses, schools, sporting fields, shopping. Easy access to freeway & 25 min drive to a city in NSW. Not Sydney
Is it actually negative geared?
If you have reason to assume better capital growth in the future, you could hang onto it and either access some of the equity to put toward something else, or just hang onto it and let it do its thing.
If rates went up and it did become negative, would you still be happy holding it? Will it need any major work in the next few years?
I like to go through a few scenarios when deciding whether to hold or sell, b/c what seems right now might not seem so right in a different interest rate environment, or in a few years when the plumbing needs replacing etc.
Jess Peletier | Seed Financial
http://www.seedfinancial.com.au/
Email Me | Phone MeMortgage Broker - Perth and Australia wide
Last tax return it went as a loss, (just) this year may be different. I think I have paid a bit more interest than 95K actually. I have a large chunk in an offset. But this will soon be going towards buying our PPOR
I don’t know if I would be happy holding it. I get all different pieces of advice and it just puts me in a spin.
How long will this take for me to make a return better than a term deposit?
We want to buy a house, maybe should sell this and put toward our PPOR, grrrrr anyway…..
If you sold yo would have around $100k cash. Using this on a PPOR will save you around $5000 pa in interest each year for the next 20-30 years. You might then be able to borrow to invest and get something with better capital growth prospects.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I agree with Terry.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
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