Hi all,
Just looking for some ideas/recommendations on the best long term financial decision for this situation.
My Dad and his partner both own their own separate units on Sydney's northern beaches. They have owned them for around 7 years and paid off a decent amount of the mortgage - I don't know how much, let's just say 40-50%, and have had reasonable Capital Gain. That is 2 units in different suburbs on the northern beaches.
They want to upgrade to a house in the same area, probably valued no greater than the 2 units combined. Their inclination is to both sell their PPRs, and then purchase the house together.
I am no expert, hence my asking for recommendations lol, but my inclination is that maybe one or both of the units could be kept and rented out (I'm assuming they would have strong positive cash flow by now) and allow the equity in both to continue to grow for another 5-10 years, then consider selling them and paying off the mortgage of the new house.
They would, of course, incur CGT by doing it this way. But would have 5-10 years worth of equity growth in the 2 units.
My Dad's concern with this idea is the high mortgage repayments and length of time it would take to pay off the new mortgage on the new house, without having the $$ from the sale of the 2 units going towards it immediately.
What would you do in this situation? Assuming you weren't looking to build a portfolio from this situation - and this was your end-game.
Thanks in advance
Just looking for some ideas/recommendations on the best long term financial decision for this situation.
My Dad and his partner both own their own separate units on Sydney's northern beaches. They have owned them for around 7 years and paid off a decent amount of the mortgage - I don't know how much, let's just say 40-50%, and have had reasonable Capital Gain. That is 2 units in different suburbs on the northern beaches.
They want to upgrade to a house in the same area, probably valued no greater than the 2 units combined. Their inclination is to both sell their PPRs, and then purchase the house together.
I am no expert, hence my asking for recommendations lol, but my inclination is that maybe one or both of the units could be kept and rented out (I'm assuming they would have strong positive cash flow by now) and allow the equity in both to continue to grow for another 5-10 years, then consider selling them and paying off the mortgage of the new house.
They would, of course, incur CGT by doing it this way. But would have 5-10 years worth of equity growth in the 2 units.
My Dad's concern with this idea is the high mortgage repayments and length of time it would take to pay off the new mortgage on the new house, without having the $$ from the sale of the 2 units going towards it immediately.
What would you do in this situation? Assuming you weren't looking to build a portfolio from this situation - and this was your end-game.
Thanks in advance