hi there we need to up-size from 2 to 3 br unit , i do have decent equity , would i sell the unit and upsize or use my equity to buy another unit and rent both units out and rent a bigger place?
Depends on a number of things... Depends on your goal, and where you are at in life - for some having a bigger place of their own is important, and for others, they are ok to 'rent-vest' Also depends on your borrowing capacity to access equity and then fund that next property Note - with upgrading using equity, you will be pretty much funding 105% of the next purchase via a loan May be worth speaking to a tax accountant about implications of keeping vs selling your existing unit and upgrading at the same time
Is your current property a good investment? Do you see it going up long term? Generally, when you use equity from an existing home to fund your new home, your tax position is crap compared to if you sold with no CGT, and put down a large cash deposit on your new home. It really boils down the property you’re moving from. If it’s not a good investment property (ie - you wouldn’t rebuy it, and it’s not got good prospects moving forward re growth drivers) you’re likely to be best off selling it rather than hanging on and using equity. As the Twinnies said, will also depend on your borrowing capacity.
