Time to cash out of Sydney and into Brisbane? A case study

So would I.. Unless it's a well located with plenty of land in Parramatta.

 

How much are your break costs? I got quoted between 4 and 6k for mine which isn't huge in the scheme of things.

 

True!

 

hmm....its a bind...

Did you have a finance broker who suggested you get 2ips with ING first..?

What is the total actual cost involved?

 

If I sell Randwick I don't pay any CGT.

Also, despite a lot of supply coming into Parra in the next few years, I believe my IP will remain in demand. It is in a quiet pocket in a small complex and is about 50% larger than any of the new off the plan high rise apartments and ground level with its own courtyard. Also, the amount of infrastructure and jobs being pumped in to the area is staggering.

The ridiculously priced OTP's are going for close to 1m so mine looks like great value in comparison.

 

Ok. Back to the break costs question then...
I'd just hate for you to sell Randwick because it is a very solid location for a long term hold with the uni and hospital and the light rail coming on.

 

I'm away from home ATM so I don't have actual numbers handy. Break costs are around 10k. Off the top of my head LMI on about 800k @89% would have been around 15-20k I think. My last equity pull on Randwick was rather expensive as LMI apparently jumps up a notch on security valued above 600k.

 

Too bad LMI is not portable. Ridiculous as it is probably the same insurer.

 

I agree...


Personally i don't think i would sell good assets though to buy other assets i think will be good and the ones i am holding may not grow for awhile. Its just counterintuitive to me. I would try every path possible before selling.. and I still don't think i would sell good assets to buy others.I would want to keep my asset base and expand it, not at the expense of selling good assets and so early on. But i appreciate your situation.

 

Thanks Leo, and I appreciate your depth of experience. This is the kind of advice I am looking for.

I might try my luck with an equity pull on my current IP in Brisbane, although I don't think that one has moved much as I only bought it last December.

Or maybe I should just sit on the sidelines for a while. Dare I say that with the banks protecting their investment positions ATM it would be fair to say that in a way they are indirectly protecting ours too.

 

NP mate. Have you tried perhaps a different broker? I know you said your broker is good but perhaps fresh eyes can make a difference?

 

Worth a thought, although I believe her when she tells me how ridiculous servicing requirements are now. Even if I managed to ditch ING.

 

by all means try another broker and take some time...
Consider this property
http://www.realestate.com.au/property-apartment-qld-teneriffe-120703629
and compare it to yours in Randwick. Im guessing there is not much of a comparison to be made.
Its also in an area that is arguably as good....and you will be left with a few leftover quid in your pocket...over 100k bucks worth.

 

It's not part of your plan to sell. I agree with the others -you'd be nuts. You've done well. It just doesn't seem worth it for 100K. It's not just the money but all the effort that goes into it as well. A Randwick flat is a gem even without a balcony or secure car space.
Can you cut down on the expense of the wedding and consider going for something positive next time?
I think you're onto something with maybe sitting on the sidelines for a while. Watch yourself - don't overdo it.

 

A quote lifted from See Change from another thread.

 

Yea I think I might consider sitting on my hands for a while. I have a granny flat project to keep me busy in the meantime!

 

All the above discussions are based on the assumption that Brissy will have a much better run than Sydney in the next 5 years. What happens if it is equal or less ?

 

I'd also recommend talking to another broker. Although your current one might be excellent, you have to realise that the majority of brokers that hang out here, on the forum, are really on top of their game, and most of them know a lot more about structuring loans for investors than the average broker on the street.

To put in in perspective, most people buy one property, a few will buy two or three. These are the customers of the average broker, so they don't really need to think about how to structure loans, or which lender will be the best (for an investor) other than maybe normal servicing & interest rates.

The people on the forum are not average in the amount of property they are purchasing, so the brokers that they use, really have to put more thought into getting the loans across the line for them.

 

Isn't this a risk that we all accept as investors every time we purchase in one area over another? I thought the 'what happens' would go without saying.

 

Yes, but are you going to risk a property in a good location over a "maybe" ones?
I live in Kingsford before, and used to walk to Randwick and Coogee beach. Even old units are usually on demand. Not saying that property won't grow in Brisbane, but why not keep Randwick and buy in Brisbane?