Sell or hold?

Discussion in 'Investment Strategy' started by AmandafromBrisbane, 24th Jul, 2021.

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Do I sell?

  1. Yes

    2 vote(s)
    15.4%

  2. No

    11 vote(s)
    84.6%
  1. AmandafromBrisbane

    AmandafromBrisbane New Member

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    Brisbane
    I have an investment property with someone wanting to buy for $680k. I bought for $255k in 2017 and spend $50k on a renovation. I owe $350k on the property. Rent covers the mortgage(at this point with low interest rates). I just pay the other costs. I earn $200k pa. so CTG on the sale is significant(over $100 k). I could use the profits of the sale to basically pay off my own home mortgage ($250k) or keep the property and use as a weekender while holiday letting for the rest of the time. It's in a tourist area on the beach. I think it could otherwise take 6-10 years to pay off both properties. I know it's a good problem to have but keen for views on what to do please.
     
    AmandafromBrisbane, 24th Jul, 2021
    #1
  2. wylie

    wylie Moderator Staff Member

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    You have two low mortgages and a great salary.

    Without knowing more, with a house near a beach in a tourist area, almost paying itself off, I'd hold it. Not advice obviously. ;)
     
    wylie, 24th Jul, 2021
    #2
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  3. AmandafromBrisbane

    AmandafromBrisbane New Member

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    Thanks so much for your input Wylie
     
    AmandafromBrisbane, 24th Jul, 2021
    #3
  4. Beano

    Beano Well-Known Member

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    Sell or hold ?
    Answer yes ...means sell or hold ?
    Answer no ...means sell or hold ?
     
    Beano, 24th Jul, 2021
    #4
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  5. AmandafromBrisbane

    AmandafromBrisbane New Member

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    AmandafromBrisbane, 24th Jul, 2021
    #5
  6. M_Chad88

    M_Chad88 Member

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    Adelaide
    Hold
     
    M_Chad88, 25th Jul, 2021
    #6
  7. Codie

    Codie Well-Known Member

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    If all your doing once you sell is paying off your mortgage to say another 2-3% PA it’s largely a big waste of capital. Including giving $100k to the tax man

    Holding a $680k asset which by the sounds of it is in demand and will continue to grow, will make you ALOT more.

    Sell and pay the mortgage off at 3% you’ll save yourself $7500 a year, Another 10% growth on the property if you hold is $68k. It would take 8 years to make that up. By which who knows what the property will be worth?
     
    Codie, 25th Jul, 2021
    #7
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  8. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    Perth WA + Buderim Qld
    It depends - what are your goals?
    • How old are you?
    • When are you hoping to retire?
    • Are you cut out for short term letting and the hands-on management that comes with it?
    • Can you plan the sale for maximum tax benefit - take a FY off work so you pay next to nothing in additional tax?
    Should I sell is never as simple as should I sell ;) If you know what you actually are hoping to achieve long term it makes the decision much simpler.
     
    Jess Peletier, 26th Jul, 2021
    #8
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  9. alanyin

    alanyin Well-Known Member

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    It’s hard to say without more details (age, retirement plan etc.). It looks like you have low risk tolerance.

    For me personally (I’m in my early 30s), I would hold on that property and use the equity as deposit to buy more properties. It seems that you also have equity in your PPOR. I would use that for IP purchase as well.

    You have good salary and should be able to borrow a lot more if you’re comfortable with it.
     
    alanyin, 28th Jul, 2021
    #9