Which to sell - VIC

Discussion in 'The Buying & Selling Process' started by WellKnow, 7th Aug, 2019.

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  1. WellKnow

    WellKnow Well-Known Member

    Joined:
    31st Mar, 2017
    Posts:
    79
    Location:
    Melbourne
    Hi all,

    We are currently weighing up our option in buying a PPOR closer to work and Melbourne CBD from where we are currently living(Berwick).

    Our plan always was to live in our current PPOR built in 2014 for 7 years and move closer to the city. I grew up in Mulgrave so possibly looking at moving into the same area again. Due to changes in work and other commitments we are floating the idea of buying a another PPOR either towards the end of this year or early next year and sell off our current house in Berwick.

    But due to the infrastructure going in around Berwick and being very close proximity to the Berwick medical precinct and new proposed freeway ramps going in at the Beaconsfield interchange we are second guessing our decision in selling Berwick as we think there will be massive price growth in a few years. We currently own 4 IPs with our first IP purchased in 2016 located in Clyde North. We now are thinking of selling IP1 and convert out current PPOR to an IP instead. I do know about CGT and other implication of selling the IP and will run the numbers with our accountant but purely looking at the growth to be had in the long run we feel Berwick might see higher CG than Clyde. And we do not plan in selling any of the other IPs in the near future.

    A bit about our situation
    Berwick , Purchased price $498k in 2014, current loan $410K + $90k equity loan and $90k in offset. House was valued at $690k in Feb 2019 expecting around $700k now if sold

    Clyde North, Purchased price $420k in 2016, current loan $448k(higher than purchase price due to refinancing) with valuation of $560k in Feb 2019, expecting around $590k if sold now.

    Both of us are on very good wages and borrowing power is no issue and we are looking for a new PPOR in the range of $900k-$1.2M

    What are your thoughts should we stick to our original plan and sell the current PPOR or hang on to Berwick and sell Clyde North. We are in our early 30s and late 20s still and the play is to hang on to the IPs of the long run.
     
    SuperWoman likes this.
  2. Propertunity

    Propertunity Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    3,476
    Location:
    NSW
    There is never a right answer to this question - which to sell? You don't have to put yourself in this situation of burning up so much mental energy trying to decide, IF you adopt a "buy & never sell" strategy. So if it were me, I'd keep everything you have, don't sell anything. Instead use your energies to find a way to get a deposit together for your next purchase. It's much easier.
     
    SuperWoman and craigc like this.
  3. craigc

    craigc Well-Known Member

    Joined:
    25th Jun, 2016
    Posts:
    1,576
    Location:
    Melbourne
    As per Alan’s comments, is it possible to hold both?
    Berwick sounds like better location if north of the Hwy, not old Berwick as such but a better location. You also have the advantage of options for CGT for your old PPOR, reset cost base when moving out and likely good tax deductions on a 5 year old house.
    Clyde North - location not as good but sounds like you have done well & haven’t bought at peak, some gains & good tax deductions going forward as well, but more supply in that area.
    If both are renting ok, you can cover the cashflow and land tax costs, long term I’d suggest hold and save the agents commission and potential CGT bill if you sold Clyde North.
    But it would all depend on your personal circumstances & short term needs & long term plans.
    Good luck
     
  4. KateAshmor

    KateAshmor Victorian Conveyancing Lawyer Business Member

    Joined:
    25th Jun, 2015
    Posts:
    711
    Location:
    Melbourne
    Getting some Capital Gains Tax, and general tax advice, would be prudent. You can then workshop various scenarios and understand the tax implications.