Hi All, I am looking for some ideas on what I should do next… I recently moved from Adelaide to Brisbane and therefore my PPOR in Adelaide became Investment Property 3. So far we love Brisbane but are currently renting a 3 bedroom unit and have about 6 months left on our lease. It has been quite a change for us.. firstly going from a PPOR to renting again. Secondly, going from a 4 bedroom house with big grounds, to a 3 bedroom unit. We are currently living in the Wynnum / Manly area and I think this is where we going to be for a long time. My daughter is at a lovely school and my two sons will also be going to the same school. We have also started getting familiar with everything in the area, making friends, joining clubs etc. We just really like the area and dont really want to uproot the family again. Im currently in two minds as to what we should do… One side of me is saying that I should buy in the area so we can “set our roots” here, but in order to do that, I need to sell IP 1 (Sydney). If I did that, I could probably afford a 3 bedroom home in the area for around $550,000. The other side of me is telling me to rather rent something in the area for much better than what I could buy and not sell any existing IP’s to finance the purchase of a PPOR. Any suggestions of what might swing me to either side? i.e rent or buy Below are the properties I currently own: IP 1 (Sydney) Purchase price : $217k Market Value: $480k IP 2 (Wagga) Purchase price : $100k Market Value: $140k IP 3 (Adelaide) Purchase Price: $365k Market Value: $450k Look forward to any suggestions, advice or tips. Thanks, Robbie
If it was me, I'd sell Wagga and take the cash leftover and put it towards a 10% deposit on a PPOR in Brisbane... save for the rest or possibly get a LOC from your Sydney property to make up the shortfall? I'm assuming Sydney more than pays for itself and combined with Adelaide should be close to cash flow neutral. I don't know about your servicing ability or expenses so I don't know if it's possible for you. Edit: can't see Wagga being a good long-term hold personally, i would quit while I'm ahead.
I seriously question the current market value of at least your first two properties. I doubt there would be anything on the market for that price in either cities. I did see an ex-houso in Tolland for 130K but ... I'd rather sell Wagga than Sydney, depending on where each of the properties is located. Though Sydney has moved and Wagga hasn't yet. It would very much depend where each is located and the finance/loans etc. Can you tell us more?
Are you suggesting the valuations would be higher? I just thumb sucked these values, probably being a little conservative.. The Sydney property is in Tregear and the Wagga property is in Tolland.
If it was my portfolio, I would keep the Tregear investment which has been a great investment. I assume it is a house and in my view and at the current price point, it is still affordable for a lot of Sydney siders. I would personally **** the Wagga property off and buy into QLD. In my view, I cannot see Wagga being a strong buy and hold candidate. Also, finance is generally harder to come by these days, so opportunity cost needs to be considered. Disclosure: I have started buying into QLD (Brisbane and surrounds) early this year.
I agree with selling Wagga.. I've kept my eye on a lot of properties down there, and they appear to take forever to sell (250+ days). I wont invest in Wagga until something like CLARA or some other massive development actually comes to fruition. Even the Gov't tried to boost it, and failed.
I would rent in the area in an equivalent to what you could buy house and ensure its for you, then buy when you're sure
Probably wouldn't hurt to ring a few REAs in these areas and get some rough guesstimations from them. Don't let them talk you into selling if you're not ready though.
Hi Robbie it sounds like you've already done your numbers, but I'd suggest it may be worth getting some advice from your accountant or seeing a mortgage broker to evaluate what your options are and the implications of each of these options. Also depends on your long term objectives and what you want to achieve. Taking a short term view, assuming you don't have the serviceability for an additional purchase it may be better off selling Adelaide as it won't have CGT implications being a PPOR. Assuming Sydney has always been an IP this will mean you're up for CGT and potentially a big tax bill.
Is this purely a financial decision, or are there some lifestyle aspects to this potential Brisbane purchase? Buying a PPOR is very different to buying an IP, so this question needs a fair bit of consideration. What serves most where you plan to be (financially) in 5 years, and 10 years?
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