Advice on selling or holding property

After some advice on whether to sell or keep our Sydney property.

Background -
Own a small older house on large block (no opportunity for development at this stage) in Sydney's Sutherland Shire. Mortgage of $470k and local agent thinks house is worth around $800k-$850k. House is only 2 bedroom and we have 3 young kids so starting to need more space. I have my own small business and wife is about to start 2.5 years study to change career.

Options are -
1. Look at building a single storey extension. 2-3 extra bedrooms and open plan living/dining. Unsure of cost. Friends in building trade have said anywhere from $200-$300k. Could fund some of it ourselves, but would still need to increase the mortgage.

2. Keep property and rent it out (rental would be around $600 pw) and then rent a larger local place ourselves in Sydney for the time being. Holding on to the property may mean it increases in value even more - but who knows, also if we decide to sell within 6 years then no CGT.

3. My wife really likes the idea of moving to the Sunshine Coast where we can purchase a new build 4 bedroom house at Peregian Beach for $630k with all the mod cons (she would transfer study up there or we wait until the end of her course and move). Selling the house means we would have a lot smaller mortgage with a larger home and we have some family there (plus prices are increasing up there too). Job security isn't really an issue, as I can run my business from anywhere and wife's new career has plenty of opportunities.

Thoughts or advice?

I'm just wondering if its a smart move getting out of the Sydney property market, but then again maybe we would be cashing out at the right time.

 

Plenty of other options to consider too:

Strategy: 11 Strategies for when you move out of the PPOR and keep it https://propertychat.com.au/communi...n-you-move-out-of-the-ppor-and-keep-it.11311/

 

@MattyJ A lot depends on what you want and how much you want to spend on it.

Moving (buying and selling) costs a lot of money and there is no certainty it will suit your family. If you like where you are then there are a lot of options to stay.

Probably also depends on the ages of your kids.

We had a similar situation and decided to put a "shed" at the back of the house - see this old thread :

Exempt Developments - NSW

It worked out well - gave us an extra 30m2 of living space and cost about $25K.
Currently used as a bedroom for a teenage son and a "media" room for the kids.

Another option would be to look at a granny flat which is something we will do in the medium term.

 

Kids are 6, 3 and 1.5. Oldest just started school.

Hence thinking about moving interstate now rather than when they are older and formed friend networks etc.

 

Why not rent in Sunshine coast? That way if you decide you don't like it you haven't sunk the capital and you'll still have your Sydney property. If you do like it up there after a year or so, you can still sell the Sydney place CGT free, and buy something up there.

 

Yes, we have talked about renting on the Sunshine Coast or living with a family member up there for a while. Just concerned prices are rising up there and what price the house that is $630k will be in a year or two's time.

 

Never sell. I'd suspect your SYD property will almost always grow more than a Sunshine Coast property. Rent to try before you buy.

 

Quickest way to fall out with your family is to live in each others pocket..

I don't see how Sunny Coast is going to take off.. there's nothing boosting jobs or income. I thought things were pretty flat up there.. I haven't been following it much though. In the long term I think Sydney will way outperform Sunshine Coast..

 

Recently completed multi-billion dollar hospital, new and the first greenfield CBD to be built in Australia and proactively trying to secure start ups. Lots of people moving there for the lifestyle and cheaper property. A mate of mine just moved and loves it, however, he did take a $40k pay cut.

 

When you are seeking to invest for good CG, you need to choose a place where prospective buyers and tenants have high (and increasing) disposable income. From what you are saying, people are moving there for reasons of cheap(er) property (I call them mortgage refugees) and are taking pay cuts. Not a good formula for huge CGs IMO.

 

I agree with @Propertunity and @Phase2 and the others. Hold your Sydney property, rent it out and consider renting on the Sunshine Coast. Long term I don't think prices will go up there as much as the prices in Sydney will. My parents bought their old home in Sydney for $32,500 in around 1972. They sold it for $170k in 1996. Sold mid 2015 for $1.3 mill. Now its currently all fenced off, house will be knocked down and it will be turning into townhouses. Worth a bucket load.