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

Discussion in 'General Property Chat' started by yorkie, 19th Jul, 2016.

  1. yorkie

    yorkie Active Member

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    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:rolleyes:
     
  2. Perthguy

    Perthguy Well-Known Member

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    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.
     
  3. The Y-man

    The Y-man Moderator Staff Member

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    It may help if you are more specific about the suburb - for some "outer east" can be Croydon, for others Warburton.

    The Y-man
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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

    Also consider the tax side
     
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  5. yorkie

    yorkie Active Member

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    Hi y.man.
    Lilydale
     
  6. yorkie

    yorkie Active Member

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    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?
     
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  7. yorkie

    yorkie Active Member

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    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.:(
     
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  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Any non-deductible debt?
     
  9. yorkie

    yorkie Active Member

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    hi terry,
    sorry you've confused me with that one?? :confused:
     
  10. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Come on - you must understand that term?

    Do you pay any interest that you cannot claim?
     
  11. York

    York Finance Broker Business Member

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    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).
     
    Last edited: 20th Jul, 2016
  12. wylie

    wylie Moderator Staff Member

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    Are you wanting to sell because the approval that will expire in one year is (maybe) tinting your view of this place. If you had never applied for the approval, would you hold this for future redevelopment. If yes, then I'd continue to hold.

    You might sell it with the approval and the next buyer has no intention of using the approval, therefore it is worthless to them.

    How much to extend it further? Can you "start" on something to allow a further extension?

    Would you buy this place again with a view to redevelopment? If so, then how much has getting the approval to redevelop cost you?

    If you would buy this house again for its potential, then "wasting" the money on the approval (assuming you cannot extend it further), is probably less than the cost of selling this and buying something else that you can develop.
     
  13. yorkie

    yorkie Active Member

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    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.
     
  14. The Y-man

    The Y-man Moderator Staff Member

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    Lumping Lilydale with "all of Melbourne" I think is a dangerous thing.

    The Y-man
     
  15. yorkie

    yorkie Active Member

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    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.?;)
     
  16. Brendon

    Brendon Well-Known Member

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    @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
     
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  17. Mick Butterfield

    Mick Butterfield Well-Known Member

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    +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.
     
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  18. yorkie

    yorkie Active Member

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

    wylie Moderator Staff Member

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    With our DA, we have four years to "substantially start". I don't know that digging a footing would cut the mustard. Our town planner did say that just lodging an application for something substantial (eg. application to install new plumbing to the block) "can" reset the clock. I think it would need to be something that can be documented.
     
  20. Christina46

    Christina46 Member

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    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.