QLD Sell or hold townsville

Discussion in 'Property Analysis' started by Big Maan, 13th Dec, 2017.

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  1. Big Maan

    Big Maan Active Member

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    Hi all

    In 2007 I purchased a nice 4/2/2 defence house in townsville suburb of Douglas for 402k. Decent size block and nice suburb.

    Fast forward 2017 and latest valuation was 370k. No longer dha but private renting . I am out of pocket $ 420 per fortnight to hold this. Interest only loan variable .

    If I cut my losses now I would get around 370k. For it . The selling costs $10k and I would be left with a loss of about 60k .

    Do I hold on for another few years hoping to recover or bite the bullet and take the hit. Hurting just the thought of losing that much money .

    All forecasts have it bottom of cycle still and even the last 12 months lost 5%.

    Thoughts please . Thank you
     
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Whats the loan ? When you sell does it release cash or not ? What may happen to cashflow if the IO ends ? Do you have other property at a gain ...The loss would c/forward. Limited comfort I guess.

    The cashflows arent great. I assume that is pre-tax after all costs. Tax likely only helps 33%.
     
  3. Big Maan

    Big Maan Active Member

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    Hi paul

    Unfortunately Interest Only and YES that is after rent etc. I have another QLD property at Ipswich which is going along Ok, another one in Adelaide and 2 in Sydney. This is my lemon. The others are travelling well.
     
  4. The Y-man

    The Y-man Moderator Staff Member

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    I believe Paul was asking how much do you owe on the place?

    The Y-man
     
  5. Big Maan

    Big Maan Active Member

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    Sorry paul, $420K IO loan.....
     
  6. Angel

    Angel Well-Known Member

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    If you sell, any sadness you experience from the loss you realise will be balanced by the satisfaction you feel whenever you think about the growth you have made in Sydney recently. And the joy of not having to deal with repairs and insurance claims from tropical storms in summer.
     
  7. New Town

    New Town Well-Known Member

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    Hi Big Maan

    That is a hard one... cashflow vs capital loss vs potential price increases in the future?!

    Calculate your after tax returns as I'm guessing you're getting a decent tax deduction on the losses. From this point it is guesswork regarding future growth but you would hope its upwards from here.