Hello, I am at a crossroads on a property I have just built. The new duplex is valued at $900k combined and rent is $44800p/a. I’m very close to positive gearing however I can retrieve $450k ($200k profit minus tax) to dump on my home loan if I sell or keep the property to start my investment portfolio. How do I decide which road best suits me? My home loan is quite high and I’m tempted to sell the duplex to reduce the home loan but I’m worried it’s a great investment property that I’m letting go of. Please help.
Regards,
Lawrence.Hi Lawrence,
How comfortably are you managing your overall debt between the properties? If it’s too much of a stretch financially to keep them both then selling one might be a good option.
Other factors such as age and how much you owe on your PPOR are going to be a factor as well. If you’re approaching retirement age and still have a large mortgage then selling your duplex and paying down your personal debt (to me at least) is probably a good idea. You don’t want to be paying a mortgage in retirement.
If you’re still young enough to pay off your mortgage before hitting retirement age I’d suggest keep it, and as it becomes cash flow positive use the extra income to help pay down your mortgage.
cheers
PeteSounds like you have done really well. Why not sell and reinvest? You have more capital now and could take on a bigger project, or maybe two small ones.
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