Opinion - Sell to Develop or Hold and Wait

I must admit i have not looked into renting before as i didnt think id be doing it for a while.

When property gearing what is involved in the formula to work out if its positively or negatively geared ?

 

Pretty basic google search will help you there.

 

So to distil down the original question, are you basically asking "should I sell my house and use the funds to become a property developer instead?"

And for me the answer is an easy "no" because we are talking about completely different things - active property development is a completely different beast from living in a home and hoping for passive growth.

I tend to advise anyone considering jumping into more active developing to have some caution and to take your time, because it requires a broad knowledge base and skill set that usually only comes from either a hands-on mentor, or a fair amount of property transaction experience, or hopefully both!

Adding the prospect of liquidating your family home to enter into such a venture, and that really says to me that its worth taking a step back and having a proper think about this.

 

Whats your max borrowing capacity and do you have the funds to do the project and possibly retain Officer property during process?

 

When you talked to a broker about being able to keep Officer and buy in Croyden area did they take into account the potential rent on Officer?

 

Well to answer your question quickly, No thats not my question. I work in the industry and i study in the industry so i do understand there different things, At the end of the day my goal is the same and it is to retire early and enjoy my later years. There are different avenues to it and i understand that, But as soon as you limit yourself to one option just because you might not be knowledgeable enough or because people thinks its not a good idea you blind yourself to alot of opportunities. i understand there is a lot to learn and this is why im openly seeking opinions and not pretending that even though i do this for a living for someone else that i know everything. I was just weighing up the pros and cons to selling vs buying and seeing if i had missed anything. Also keeping in mind i didnt buy the house im currently in because i like it, i bought it because i knew it would raise a great deal in value, value i could later use. So dont be mistaken this is not a "family home". My goal of having a property portfolio is still the same, the process in achieving it might change but i understand with new avenues comes new knowledge and i will ensure that i gather than knowledge to make an informed decision. If i listened to people who told me "no", i wouldnt have bought a house in officer with a 5 percent deposit hrs away from friends and family, with now being able to put down a 25 percent deposit on my next IP opportunity.

The idea is to move into a potential split block and reno the front. I understand i need to start small to gather experience and knowledge. But you need to start somewhere.

@mickyyyy we are now in the process of understanding our maximum borrowing capacity, We were using hypothetical purchases to understand a scenario we could do it, We are now looking at it from a max capacity point of view.

@Westminster Yep the broker is factoring a yield of 3.8% to be safe.

Just waiting for the bank to reevaluate the house and understanding my max borrowing capacity while holding onto the house before i make the move.