sell or let

[terry]

Hi All,

We have a property in the south east of england (brentwood essex), it was originally valued at between £285 to 275k it went on the market during the gulf war and interest was low hence no offers. Over a period of 1yr we have now reduced the price to £255k and sold. This is a four bed detached home and rental price would probably be around £1000 a month (would that be 4.7%yield). The area seems to be renting ok. but hse's are still taking a long time to sell, but one did sell for £30k more than ours just a while ago. After discovering this forum I thought it would be good to ask you for some advice and pros and cons. We are emigrating to Brisbane in the near future so management fees would be at least 12.5%, there is £235k of equity in the property. So should we cancell sale and rent it out or take the money and start afresh in queensland, tax wise I will probably not have an income for at least 3 months after arrival.

Thanks in advance

Terry

[BV]

Hi Terry,

Is your house paid off?
When are you coming over?

cheers

[terry]

We have less than £20,000 left on the mortgage, which is on a variable rate of 4.94%. We did plan to come in September 2003 but waited for a buyer on the hse. The sale has not yet got to the stage of signing contracts although surveys have been done by the buyers. There are 3 endowment policies that service this loan but for tax reasons I think it is better to sell these off prior to becoming a tax resident in australia. We are ready to come over as soon as the hse has been sold which should be this May, this timescale would not change if we decided to let the hse.

Regards

Terry

[BV]

Hi Terry,

The biggest issue people have when they move to another country is employment.

If you find a job you are happy with then you can think of settling down
and then bring your money over to buy something or invest.

I personally wouldn't sell if I didn't have a specific need for the money.
Selling your house and putting your money in the bank for a taxable 5%
is not worth it.

The standard variable home loan rate is usually over 7% here.
Maybe you should borrow money from a UK bank at 4.9%
and bring it with you....

Some of the property experts are predicting that the Brisbane
market has still room for price increases.
Others say it has peaked. None really knows.

cheers

[terry]

Thanks for your replies BV

Our hse. here is in good order but would probably benefit from double glazing to help achieve a permanent rent. There is also a large radio mast nearby that I believe was a secondary reason why the hse took so long to get a buyer, not sure if this would affect to possiblity of getting tenants. Am I right in assuming that if I have no income in Australia the income from the property would be tax free.

I am an electrician and having been over for a look in December, it seems I would be ok. finding work after I get my licence, which will take about 3 months.

Don't think there would be any problem taking equity out of our hse. to bring over, was thinking maybe draw out small amount then more after I was working full time, so as to avoid the tax. There are still some low fixed rate offers here at around 3.5% I think but I will check that out.

Reading through previous posts I believe I could let the hse (ppor) for 6yrs. before capital gains could kick in as long as I did'nt have a ppor in Australia?

Does 12.5% management fees sound ok.

Regards

Terry

[BV]

Terry

Income up to 6K is tax free you will pay 17% tax for every $ over 6K
up to $21.6K when you will pay 30% for every $ etc.....

here is a link to the relevant ATO page.
http://www.ato.gov.au/individuals/content.asp?doc=/content/12333.htm&page=1&pc=&mnu=5464&mfp=001/002&st=&cy=

12.5% Management fees sound high, but it could be normal over there.
Its 6-7% here.

Finding work in your field is ok atm.
Its easier in some places than others but at the end of the day,
if you want a job you will find one.

cheers

[terry]

Thanks for your help Bv

Terry