Hi Steve,
Your LVR will be high (80%?) ('cos you've been drawing down against little growth), so the CGT & expenses will probably take the majority of the remaining 20% of equity.
And you lose a valuable growth asset at the worst possible time.
Then the next year, you may lose another one.
That forever sets you back significantly for future growth.
Steve, would you have recommended LOE to Japanese IPers in the 1980's ?
Cheers,
KJ
I agree that it hurts the growth equation, but it helps the risk/volatility/SANF equation immensely.Steve Navra said:Selling hurts the equation so badly
Because you can pre-empt the no-growth problem.Steve Navra said:Why sell and give up all the potential future growth on the asset before you know IF a problem will occur? (And all the costs involved.)
If I was obsessed with growth (as I was in the pre-retirement phase) I would agree wholeheartedly, but now I'm more balanced and I'm obsessed with SANF AND reliable income & a bit of growth.Steve Navra said:Why wouldn't you rather draw down the net equity
(Up to 80% LVR) and invest these dollars for a return??
By then it may be too late - LVR is maxxed out, spiralling interest, IP prices have slumped etc.Steve Navra said:If it all went pear shaped because of the many fears that are being suggested, then (And ONLY then) you can sell the property and you are back to the conservative approach.
Be pre-emptive instead of merely prepared - avoid a disaster.Steve Navra said:Why be predictive? (IE predicting a disaster)
Rather be prepared and react to an event. (IF it actually happens.)
Maybe the next 22 year slump is just around the corner and in this case it would have been far better to have put some of your "Hard earned" asset into a lower risk, high yielding asset.Steve Navra said:Maybe . . . just maybe the next BOOM is just around the corner and in this case it would have been far better to have held onto your "Hard earned" asset.
When you are forced to sell later (after no growth), IP price will have slumped ('cos IP sentiment is low).Steve Navra said:My question then is what have you got to lose, by NOT selling now instead of (improbably) later?
Your LVR will be high (80%?) ('cos you've been drawing down against little growth), so the CGT & expenses will probably take the majority of the remaining 20% of equity.
And you lose a valuable growth asset at the worst possible time.
Then the next year, you may lose another one.
That forever sets you back significantly for future growth.
Steve, would you have recommended LOE to Japanese IPers in the 1980's ?
Cheers,
KJ