Property in Tolland (Wagga).. hold or let go?

Hi All,

I was wondering if anyone was familiar with the property market in Tolland (NSW)?

I bought a property there in 2013. I think I paid R100k for it. Stock standard 3 bedroom, one bathroom. In good condition and currently has very good, long term tenants paying $175 per week.

I am not sure of the current value, but I guess it could be anything from $110k - $125k. My property manager says theres probably not much more I can do to increase the rental.

Its not costing me much to hold, but at the same time, I’m not sure if this one is worth holding?

Cheers,
Robbie

 

It shouldnt be costing you at all. Are you sure your numbers are right?

 

Yes, im pretty sure my numbers are correct, why dont they seem so?

I also have landlords insurance ($1k pa).

 

Rent is 8k. Interest maybe 4-5k. 3k+ of expenses sounds high?

 

The average net rental over past few years ha probably been around $6,500.

Average Net Rental: $6500pa
Interest: $6000 pa
Insurance: $1000

 

OK, let's assume it sold for $125K today at best - a gain of $25K over 5 years or around $5K per year. If you sell then you'll be subject to CGT & sales cost - have you calculated how much actual profit will you be walking away with?

If it's not costing you too much to hold today then I would say just keep holding onto it, unless you can find something else that your DD shows will be getting a better ROI instead.

Cheers,
David

 

I would be looking at what my current rent is and current expenses along with buffer.

You said you have good long term tenants
Rent $9,100

Interest $6,000 (what rate are you on? Say loan amount $106,000 @ 4.8% is ~$5k)
Insurance $1,000
Property Manager $1000?
Maintenance $1-2000?

 

I had a chat to the agent, who said I would be able to achieve $110k fairly easily. Once I add agents commission ($5k), adverting ($1k) and settle outstanding mortgage ($94k), I might be left with about $10k profit (before CGT).

Given that I have already sold a property this tax year, which will push me into the +180k tax threshold, it probably doesnt make sense to be adding more profits (when im actually trying to reduce my taxable income)

As this property is not costing me anything to hold, I might hold onto it for another year and look at selling next tax year as the value will hopefully have gone up a little more and my taxable income will be well under 180k (it is only going over 180k due to the sale of a property this tax year)

 

@Brady I'm $94k @6.42% (interest only). Just realized interest is a bit high?

 

Should be able to be 1-2% lower then that, who's the current loan with? Did you need to go with them due to policy/servicing niche?
I'm looking re-fix one of my regional NSW properties for 2 or 3YR @ 4.19% IO with CBA

 

I have the loan with AMP. Not sure why we went with them, but I guess theres no harm giving them a call?

If I could knock off 2%, it would knock off about $2k p/a!

 

@Brady if you dont mind me asking, what is the size of the loan you looking to fix @ 4.19%?

 

Note if you don't have any other borrowing with them you're going to struggle to negotiate with $94k loan.

 

Ive asked the question, they going to give me a call back to see what they can offer me.

 

AMP reduced the interest to 5.42%