VIC Sell in Caroline Springs o not to sell

Hi All,
I have a property in Caroline Springs situated in a nice location near the lake etc..
We are now renting in Bayside and thinking of buying here but don't have enough capacity to borrow now until after the financial year due to job change.
I would prefer to rent it and keep it as an IP as i guess no idea whats going to happen with the property market moving forward.
I was also thinking of selling as the market is hot and then keep the cash and buy later.

Any advises would be appreciated

 

Not advice, but I sold one near the lake recently. Depends on your strategy moving forward.

 

Thanks for the reply.
What do you mean by Not advice?

 

Literally, it means I do not wish my comment to be perceived as advice. Ultimately, it is your call. Mine was one on 9 IPs, and given the price increases in the area, I wanted to liquidate.

 

Ok thanks. Correct the price increase looks promising

 

I wouldn't be selling with the view to buying again when the market is hot. That seems like a bad idea, timing the market is not easy plus there are significant transaction costs involved. I'd only be selling if you want the capital for some other reason. Another IP in a different area, paying down debts, shares, business etc.

That being said, there may be tax benefits to selling now.

 

Thanks Y-man
I lived there for about 9 years.
I moved out last month.

 

Id probably sell and wait a year or two and then buy in bayside
It will cool down or drop back a little.

If youve got a good profit in a property where the market is hot/ nearing peak then why wouldnt you bank the profit?

 

I'd probably sell. I don't think rental demand is that good over there as the main reason people buy there is due the affordability of housing and yields are likely low for this reason. It's a PPOR suburb IMO

 

If I sell and my situation change which means I wouldn't be able to enter the house market again.
If the market stabilises then it would be perfect to sell now.
True the rental is not good there

If I cash in the profit now would I be able to get a pre approval loan?

Tough decision really

 

Confused as to what your saying?
Why would you cash in now and go and get another loan straight away in what is effectively the same market?
Why wouldnt you be able to get a loan in a couple of years?

 

Your logic is all over the place I'm sorry..

it is owner occupied areas that drive price growth.. geography to the city plays a role but people buy where they want to live or selll to buy again closer to where they want to live..

Rental demand doesn't drive price growth, it just makes things a little more difficult comes finding a tenant. I'm sure vacancy rates are low there and also it wouldn't be out of the norm timeframe for finding a tenant.

I understand you are saying people don't rent here they buy coz it's affordable, but I think that statement was true 7 years ago, not now I'm sorry..

 

Selling in my eyes is a longer game. Sell-buy again-stamp duty etc-already paying for this cycles growth..
Taking a step back to take 2 forward..

but in this case why do you need to take that step back?

PM me of you want to bounce thoughts off me on this.

For me it comes down to this:
1. Don't sell anything unless you have to.
2. How long have you got until retirement
3. Why sell? Coz the market is hot? Don't get caught up in hype. It's a cycle. Do you NEED to sell it?
4. Will it stop you from buying another house PPR once you have job history for lending?
5. What is the loan balance?
6. What is it worth?
7. How much did you pay for it?
8. How much is it renting for per month?
9. Is the rent at market value?
10. Will you be relying on equity from this property to help buy bayside property?
11. Is Caroline on interest only or P&I

Etc etc..

It is understanding this part.
if the above is not that favourable, then start looking at the opportunity cost of selling it and buying in bayside vs holding and buying in bayside.

 

Thanks Greyghost for your detailed post you are a star
Will PM you

 

@investnow , I think @Greyghost offers some sound points. Let us all know what you ultimately decide. Note the agent who sold mine is very good - PM me if you want details.

 

Yes but an investment property that costs you money to hold and where you go some time without a tenant is a bit pointless IMO. I'm quite familiar with the suburb - pretty much my entire extended family lives in the surrounding area and I'm there several times a year.

New/er houses commonly sell for more than existing ones which is quite bizarre (and not how I would define 'investment'). One relative recently purchased a newly built house for over 700k. How much would this rent for as an IP (or should I say 'how little?') - $400? lol. How much longer will any 'growth' continue given the demographics of the people in the area? Just next to my parent's house in a nearby suburb there was a house (about 10 years old or so) which didn't even meet the reserve at auction recently despite the obviously very high level of finish and expenditure by the current owner. It is still for sale a few weeks later. It is very much an overrated area IMO

 

If you can get 700 or 800k for a place in caroline springs then take the money and run i reckon!
Wait for the market to cool and drop back - it always has in the past
Buy a ppor in bayside for 1- 1.2 location dependant
Why hold an 800k asset in caro springs with a 3% yield
800k isnt an insignificant amount of money and its hard to see caroline springs getting more expensive than that in the mid term
Its an estate with plenty of land behind it

 

Again your logic is twisted.
It's about affordability in that ring. Ripple effect.
My cheapie in Albanvale has gone from 300k to 430k in 18 months.
3 br 1 bath 70's brick.
Why? Because sunshine and surround we're moving quick.

I grew up in Taylor's lakes & Glenroy. So I know Caroline Springs very very well.

Did you not read what I said about selling.
It was not a case of one vs the other.
I asked: can you keep this, rent and then extract equity to buy bayside.

I wouldn't be advising an investor to goto Caroline springs and buy for $500k.

So what are you saying buy for $700k and get $400 rent?
This is about someone retaining a property or not. Why sell if not needed?

My Albanvale property was slow in growth, but if you can hold time heals.

How far can the growth go??? Here is your answer:
It's the end of the cycle for most suburbs in Melb, so how is Caroline springs any different? You could say the same thing about affordability and rental yield for Greenvale etc..

Sure will a more expensive bayside property out perform Caroline springs? It may.. but I was never debating or comparing the performance of these. I was trying to convey - don't get anxious and selll a property (previous PPR too) prematurely.. understand your numbers, servicing, risk profile and goals and if you can hold it then hold it..

I don't think you fully comprehend basic supply and demand and are caught up in the short term hype..

 

Why wouldn't you hold? Extract equity and wait?
Larger asset base working for you?