Selling 2 investment properties to buy another home?

Discussion in 'Investment Strategy' started by Mermaid, 23rd Aug, 2019.

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  1. Mermaid

    Mermaid Active Member

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    I own 2 properties outright totalling 1.5m in Sydney and am looking at buying a home worth 1.3m in Queensland. Household has income of 120K a year. Is my only option to sell one or both properties?
    Also can I buy before I sell? Buy in Queensland while the market is still relatively low and then sell in Sydney later when the market has stabilised a bit?
     
  2. Terry_w

    Terry_w Well-Known Member Business Member

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    It will depend on your circumstances and serviceability. You might be able to borrow a fair bit wih that income and rents on the 2 properties.

    You could also consider a bridging loan so you can sell and pay out the loan after settlement of the new property
     
  3. Mermaid

    Mermaid Active Member

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    Great thanks Terry. Is it important to get a good broker or is it much of a 'muchness'
     
  4. Terry_w

    Terry_w Well-Known Member Business Member

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    without a good broker you might as well go to the bank direct.
     
  5. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Hi Mermaid :)

    It's impossible to tell without a heap more info. Banks do vary in how much they'll lend so a good broker will be able to direct you to one that will help and if servicing is tight will be able to guide you in terms of a strategy to get the best outcome.
    W
    you prefer to keep the Sydney properties if you could?
     
  6. Mermaid

    Mermaid Active Member

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    Hi Jess,

    Yes I'd definitely prefer to keep them if I can but I'm not sure If it's a viable option. I dont like the thought of selling in Sydney with the market at the moment. I do plan to move to Queensland within the next year but I'm not sure if I am being naive in thinking I could also keep the two properties until the market stabilises
     
  7. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Only one way to find out! I reckon you could with the right structure in place and risk management sorted.
     
  8. Mermaid

    Mermaid Active Member

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    Thoughts on selling units in Sydney (Eastern suburbs) to buy a home in the Gold Coast? Thinking of growth in both areas in the next 5-10 years. Foolish idea, or not?
     
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  9. Trainee

    Trainee Well-Known Member

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    Factor in CGT, selling cost, and serviceability.
     
  10. Sackie

    Sackie Well-Known Member Premium Member

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    Do these units in eastern suburb of Syd have add value potential?

    With all the transaction costs I'd be very hesitant to sell two units in likely a fantastic long term hold area of syd and buy in the Gold Coast. The deal would have to be reeeally good for me to consider this.

    I recently sold a unit in Syd but that equity was immediately put back into developments to work hard for me.
     
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  11. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

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    There's quite a bit to consider in addition to whether the East will grow more or less than the GC in the long term.

    Sounds like theres more than one property in the East so there might be CGT which will impact how much is available for your home. Also consider the tax efficiency of your current structures vs a PPOR. Your accountant might be a good place to start the decision making, since there's no real way to predict growth.
     
  12. Mermaid

    Mermaid Active Member

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    I would need to do some pretty major renovations to at least one unit. Units are only 1 bed, and appreciated around just 70% in 10 years. Ideally would like to relocate to the GC, however not sure if Its viable to keep Syd properties and get mortgage with interest rates etc.. fish out of water when it comes to all of this!
     
  13. Sackie

    Sackie Well-Known Member Premium Member

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    If your looking to relocate to GC and put the sale funds back into your ppor then that's a different story.

    Re Reno, have a look at the price gap for best removed 1 bedders as opposed to what yours will sell now and with a Reno. Determine if the costs to reno justify the increase in sales price.
     
    Last edited: 25th Aug, 2019
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  14. Mermaid

    Mermaid Active Member

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    Ok will do thanks
     
  15. Angel

    Angel Well-Known Member Premium Member

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    Try renting on the GC for a year to determine if it really is where you want to settle. Remember that you dont want to buy a house and then a year later realise it might be a nice house but in the wrong location as far as schools/traffic etc go.
     
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  16. Angel

    Angel Well-Known Member Premium Member

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    Maybe sell one unit in Sydney for now (if accountant concurs) and leave the other one for a year or two while deciding exactly what you want to purchase next.
     
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  17. Mermaid

    Mermaid Active Member

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    Thanks Angel, was planning to rent first to get a feel, might not be our thing. I am wondering how much the GC will rise in years to come, like many are saying and if Sydney will increase at least back up to '16 prices or more in the next few years.. maybe buying in the GC is riskier than what I first thought though
     
  18. Terry_w

    Terry_w Well-Known Member Business Member

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    What is best in life is often not what has the best tax outcome. But I say go for it, after careful planning as this could greatly improve your life style and you can alway buy replacement investment properties later, more tax effectively too
     
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  19. Mermaid

    Mermaid Active Member

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    Good attitude, thanks :)
     
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  20. Cimbom

    Cimbom Well-Known Member

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    Back in Canberra!
    Which specific suburbs in Sydney's east?