Upgrade ppor v new ip

Appreciate feedback. Given interest rates are so low, thinking a sensible option for me is to upgrade my 2 mill ppor to 3 mill ppor rather than invest in a new ip worth 1 mill (especially in melb where the yield is crap). If i move to a more expensive area with better house i can expect better cap gains, better enjoyment of ppty, no tenant hassle and the gains are tax free. The cons i guess are lost rent and high concentration of wealth in one asset and cant offset losses (which are small now due to low rates anyway). Do people here think maxing out a ppor upgrade is a better and better option nowadays given our low long term rates?

 

In your scenario yes it makes sense, but it also depends on your cashflow when taking on the extra loan when upgrading.

 

Upgrade in ppor also means an increase in rates, and likely maintenance costs also...

 

This is an interesting topic I think and will be interested to see the replies because I’ve had similar thoughts.

The only problems I see are higher rates, maintenance costs etc and that you might become so accustomed to the new PPOR that you never want to leave, so even thought you might make big gains on it you’ll never actually realise that profit.

Easier to sell off an IP that has no sentimental value.

 

True. Although my plan would be to move regional in 10 to 15 years when i retire.

 

I am also torn with the same decision. Although I actually quite like where I currently live due to proximity to the kids' school.
I did consider buying a new PPOR and renting out the old PPOR but then there will be CGT implications when I do go to sell it.

 

Also more stamp duty on the 3 mill ppor v buy a 1 mill ip.

 

What is it about your current PPOR that isn't meeting your needs? That should drive your decision.

If it's strictly about making money, throw it at digital assets/Bitcoin. It'll go 4x or 5x by year's end. You can quote me on that.

 

Need another room and bathroom. Happy to invest it all in bitcoin and share half the proceeds if you guarantee to cover any unexpected loss.

 

So you're looking at similar areas to where you're currently living, to minimise commute or other lifestyle disruptions? Or willing for forego convenience for potential capital gains in future?

Given:
Expert Bust #10 - High Past Growth is a Red Flag
suggests high past growth is indicative of lower capital growth in the near future.

As for the BTC, you shouldn't listen to strangers on the internet for investment advice anyways, but just humour me: buy yourself $1000 worth from a cryptocurrency exchange. It will be more than enough buy you a bottle of Remy Martin Louis 13 for Xmas.
https://www.danmurphys.com.au/product/DM_23468/r-my-martin-louis-xiii-cognac-700ml