It's OK to SELL

Discussion in 'Investment Strategy' started by MTR, 5th Jul, 2017.

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  1. MTR

    MTR Well-Known Member

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    Even more reason to strategize.
    Government are currently looking at ways of screwing investors wherever they can.
     
  2. MTR

    MTR Well-Known Member

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    but currently investors get a 50% tax break off profits, this is what they want to abolish, this is huge.

    Wont impact on me necessarily because I now buy all my properties in a Trust, but I assume most investors buy in personal names????
    I am not an accountant, don't ask me specifics, but this is what I believe is being proposed.
     
  3. Perthguy

    Perthguy Well-Known Member

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    Yes, the government could. As it stands now, property investors are generally eligible for a 50% discount on any capital gain. Instead of a 50% discount, the government could change that to a 40% discount. This would likely be across all asset classes including shares, so it's obviously politically very sensitive.
     
  4. Perthguy

    Perthguy Well-Known Member

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    The proposal is to cut the 50% discount to 25% for property and shares and all other asset classes. It's obviously a big deal and creates unintended inequities.
     
  5. Poppy

    Poppy Well-Known Member

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    A little look at tax regimes will answer your question - when the UK set CGT at 18% revenue doubled overnight as everyone paid it and agreed with the low flat tax. But when it increased to 28% revenue halved overnight!

    In Australia ours is essentially 25% as in sydney when you sell the net profit is usually well over 200k, up to the millions, and you simply halve it and add it to your taxable income (hopefully in a low income year!!). This makes it roughly 25%. Not great. If any move was made to increase this no one would sell in sydney making a very very tight market even worse. I buy around neutral bay and stock is extremely low as none can sell and no one upgrades as your house is already 3 million so no one can afford it, let alone an extra 200k stamp duty.
     
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  6. xactly

    xactly Well-Known Member

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    Here is a lady not afraid to sell.

    Re: How we bought 20 IP's in 5yrs

    brenda was the pin up girl of the boom with 20 IPs
    now all sold and living on divs as you see.

    note the shock and horror of selling in the forum comments.
    sometimes it just really is better to sell.

    I like one of the poster comments re selling.
    dont confuse the journey (invest) with the destination (retire)
     
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  7. highlighter

    highlighter Well-Known Member

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    The idea of cutting the CGT discount has been floated recently and I think it could certainly be on the horizon, but I suspect a hefty foreign buyer or vacancy tax is more likely. I think we're getting to political crisis point, honestly, as the government with the shifting demographic makeup of Australia needs to appeal to young folks now. (They can look to Jeremy Corbyn's success as evidence for this.) That said, I think cutting CGT concessions might be too unpopular with older voters, taking it too far. Going after foreign investors would be much more palatable.
     
  8. Gockie

    Gockie Life is good ☺️ Premium Member

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    Great thread. And I saw "Motivated money" got a mention on it too at the bottom of that page.
     
  9. MTR

    MTR Well-Known Member

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    Love to know how she is doing today, shame no longer posts

    Brenda was a bit of a legend on SS
     
    Last edited: 9th Jul, 2017
  10. skater

    skater Well-Known Member

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    I'm not afraid to sell. :D
     
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  11. MTR

    MTR Well-Known Member

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    When I started investing in 2001, selling was a crime

    I got that one slapped out of me pretty quickly when I realised how important cash flow was.

    For some reason there is a mindset that you will never achieve the same growth ever again, but there will always be boom cycles and there will always be bust cycles, bingo opportunities
     
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  12. skater

    skater Well-Known Member

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    Very true! If I had my way, I'd sell a lot more.....but Hubby is reluctant. There's a few that we've had for years, that I'd gladly sell. Although they were good purchases at the time....they are past their 'use by' date as far as I see. I'd rather unload & be in a stronger position.

    We've got one that's worth around $600k, more if we did work on it, but doing the work will possibly only give us a dollar on dollar return, so not worth the time & effort, current rental yield is pretty low by my terms @ $460pw, and we only owe around $150k on it. We paid $230k for it, so looking at around $370k CG. Split that down the middle is only $92k taxable for each of us. I really want to sell this one.....in fact have been having this same conversation for a few years now & Hubby 'really likes' this one. Grrrrr.

    I'm hoping I can use the strategy I used last time I got my way.....locating something with a similar (or maybe higher) rent return, that is a lot newer, and at a much lower cost to replace it, based in a capital city. Basically swapping it out for something with more depreciation, less maintenance, but still in a catchment to get good future growth, and paying cash for it.

    Wish me luck!
     
  13. MTR

    MTR Well-Known Member

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    Good luck, hope he did not read this;)
     
  14. skater

    skater Well-Known Member

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    No....I'm safe! He's too busy rehearsing, and practicing guitar at the moment to spend too much time here.
     
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  15. WattleIdo

    WattleIdo midas touch

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    Would you consider selling when you have messy tenants on a new lease and an unrenovated house ... in the dark months? I'm certainly considering it but the reality looks like too much work.
     
  16. skater

    skater Well-Known Member

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    It would depend on how likely I am to do the reno, but I try to hold onto crappy ones until there is a gain.....and then offload.

    I've got three that are less than optimal at the moment....and they're three that we'll be keeping. Two of them have long term tenants who are paying above market rents. We want to reno, but as long as the tenants are happy to stay put & pay, we're just going to let them sit there. The other one was earmarked for a very reluctant reno last year. It became vacant, just as we were about to go on holiday, & were quite busy.....but Agent came back with a tenant @ a price we were happy with, so it's just sitting there too now.
     
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  17. MTR

    MTR Well-Known Member

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    The sell or not to sell dilemma.... Now only in the US and for good reason


    upload_2017-7-9_10-32-39.png upload_2017-7-9_10-32-39.png
     
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  18. WattleIdo

    WattleIdo midas touch

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    Good tenants who want to stay forever and will pay whatever rent because they've got a hoard of kids attending near-by schools sway me in one direction; the 'impending downturn' sways me in the other. I suppose the property in question is a lot easier to hold now than it was to start with. I do see the logic in selling though.
    Another consideration is age. On the one hand, I probably wouldn't be able to buy this same property again - certainly not now, though my pay is higher than it was when I bought it. Seems the banks are finally bringing up the issue that I'd be well over 70 at the end of the term (with a new loan). On the other hand, it could well be a good time to get rid of as much debt as possible and chill out at work.
    Yes, it is a dilemma.
    At some point, I'm going to have to decide to hold or sell and then put my head in the sand about it from that point onwards.
     
    Last edited: 9th Jul, 2017
  19. MTR

    MTR Well-Known Member

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    By the way anyone selling ??? or sold recently?? why?? If you care to share

    I will start, I sold out of Melbourne, 4 townhouse development and a DA to builder? Certainly this market continues to rise, but it has been booming since 2013.

    I decided to sell because I can pump the profits from sales into other projects and continue recycling my profits. I have no idea when the Melb market will slow down, I prefer to play it safe.

    After boom comes bust, we just don't know when? I prefer to take my money and run. As I have mentioned in my early days of investing my mindset was never sell any assets but this did not help my lifestyle and it also caused stress when a boom market turned into a bear market.

    Another consideration for me is the fact that interest rates are rising which will impact significantly on returns. Cash flow is critical to keep growing a property portfolio.

    MTR:)
     
  20. hobo

    hobo Well-Known Member

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    @MTR When did you sell the 'DA to developer' block, and when did you sell the 4 townhouse development? Did you just sell recently?
     

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