to sell or not ? advice please from some people who have had hindsight!!

hi all,

I'm just after some advice/guidance on whether to sell or keep a property.....bit more info on the situation.
3 bed house house and 1 bed s/c gf on 930 sqm block in melbourne outer east with plans and permits to remove gf and build 3 bed house. currently value $500k- $550k (spoke to agent yesterday he's a long time friend.) rents for $540 pw which is great. plans have 1 year left before they expire and they have had 2 extensions to date. i have currently moved from melbourne to albury/wodonga region and busy building 3 houses here and just can't see me building down there. so do i sell or keep.

has anyone else been in this situation. thanks in advance.
yorkie

 

I was in a similar situation and sold and don't regret it. But ask me again in 10 years and I probably will

Don't forget your tax planning if you have a capital gain.

 

How much funds would be released, and could you put those funds to better use?

Also consider the tax side

 

Hi y.man.
Lilydale

 

Hi terry.
Mortgage is $275k so should do ok. Minus cap gains. Bought in 2006 so the 50 % applys. Will speak to accountant to work ou TV approx cap gains cost.
And i think i could put the noney to better use somewhere else now. Don.t think melbourne will do much more now for a few years?

 

Hi perth guy.

I remember selling my first i.p. and then thinking 5years later after the suburb went thro a big boom. Bugger should have kept them. But they went towards other i.p that have done well. Its a part of the process i guess. Can.t hold them all when you hit the serviceability wall.

 

Any non-deductible debt?

 

hi terry,
sorry you've confused me with that one??

 

Come on - you must understand that term?

Do you pay any interest that you cannot claim?

 

Non-deductible debt is debt that is not tax deductible (interest). Most common example is debt on your home (PPOR interest). In other words, debt used to purchase a personal asset (non-deduct) as opposed to an income producing one (deduct).

 

hi terry,
no its all claimable not crossed or anything.

hi york,
thanks for clarifying that, i think i was trying to over think my answer and brain went blank.

hi wylie,
this is where my head is thinking in different scenarios and good to get some wise thinking from some people who have been round the block a few times.

appreciate your thoughts.
thankyou.

 

hi y-man,
true, but the stats on sqm say that 3 bed houses in lilydale have averaged around the $400k mark from 2010 to 2014 and have jumped now to above the $500k mark. so i should have been more location specific.
unless you know something.?

 

@yorkie just thinking outside the box, have you thought of what you need to do to have started the subdivision so the plans don't expire.
I assume you only need to start it to prevent them expiring, it may be as simple as doing a few pier holes at the rear of the property (starting foundations) which you may be able to do without really affecting your tenants?

Just a thought, otherwise if you're wanting to sell it for 500k I'm more than happy to talk to you! Lilydale is my home ground haha

 

+1 From my experience if you start the development Poor a footing you would have started the development and there will be no expiry. I would just ensure that when you start the build for real that you comply with the current building code as to not have any issues come finals.

 

hi brendon, was just quoting the approx median. if interested let me know via p.m.

 

I'm sure it varies with different Councils, but we've also had advice that in Brisbane lodging an application for "Operational Works" re-sets the clock. The works don't need to be done, just the application submitted. I don't think it buys you another full 4 years on the DA though, might just be 2 yrs. I've been led to understand that you can keep repeating this process to keep buying time on an on-going basis.