a good time to buy/ sell in Mt Druitt?

[moses]

I have a unit in Mount Druitt but would like to get a property in QLD sometime in the near future

i'm able to get a small loan (330k) for a 2nd investment, or i could possibly sell my Mt Druitt unit & get more $$$ to buy in Brisbane

Ideally, i'd love to get a house but not sure when would be the right time to sell in 2770 .. and if i was going to buy a house in Brisbane, im thinking northside as it's quite a bit cheaper to buy close to CBD

any advice really appreciated - im still learning and value any tips/ hints you can offer

 

[moses]

also, spoke to sydney real estate about selling my unit this morning..

he's words: "the mount druitt market is very strong at the moment - kinda rediculous, its being sold very quickly"

 

[Propertunity]

The Mt Druitt market is performing strongly.......and Brisbane may be one of the next places to start a growth phase, BUT:
1. You don't get rich (if that is your goal) by selling your properties. The Mt Druitt one has done well. Just leave it alone to do its thing and if you need money out of it, then just refinance out some of the equity in the form of cash, when you need it and it is available.
2. Why sell a dead cert that has proven to do well since purchase, in order to buy something that you are not 100% certain of?
3. You burn too much cash when you sell just to re-buy again. i.t. the transaction costs are high to get into and back out of, property.

My advice would be to buy and hold and never sell (unless you bought a dog property).

 

[see_change]

Two alternatives.

Sell , pay CGT , selling costs , " access to all equity minus costs " . Possibly able to borrow more in Q'land as no servicability concerns re Mt Druitt.

Revalue and draw down equity , Will be limited to ? 80 % of equity . Servicability of Mt Druitt will be taken into account with how much you can borrow in Brissie . Will benifit from further growth in Mt Druitt . at some stage if not already Mt Druitt will become cash flow positive ( that's a good thing )

A Mortgage broker would be able to give you ideas on how much you can borrow in the two senarios. Also talk to your accountant for figures , but not necessarily for advice...

cliff

 

[travelbug]

Hi, what do you hope to gain from selling the Mt Druitt one?

Have you done your research on the Brisbane market? And also know why it is cheaper to buy Northside closer to the CBD? Just asking.

Seeing you are in the aquisition phase it seems buying more (and not selling) would make sense.

 

[moses]

thanks both.. i actually recognise both of your names from when i first bought the mount druitt property a long time ago! much appreciated

i've got a gut feeling that it will be better to keep the mt druitt place and just settle to buy a cheaper place again in Brisbane im sure i can find something for 330k

or theres possibility to buy another unit in western sydney? i just hate paying the strata

definitely appreciate the fast responses!

 

[moses]

Hi, what do you hope to gain from selling the Mt Druitt one?

Have you done your research on the Brisbane market? And also know why it is cheaper to buy Northside closer to the CBD? Just asking.

Seeing you are in the aquisition phase it seems buying more (and not selling) would make sense.

the only reason i'd think to sell the mt druitt unit, is to be able to afford a nicer property in QLD..

and as far as the brisbane market goes, the main reason im looking to buy there is for lifestyle reasons. I'm hoping to relocate there in the near future thats the motivating factor i guess

 

[Propertunity]

and as far as the brisbane market goes, the main reason im looking to buy there is for lifestyle reasons. I'm hoping to relocate there in the near future thats the motivating factor i guess

Ahhh - now you are muddying the waters - what might make a great IP will not always be the place you'd want a PPOR. Don't mix investing decisions with personal lifestyle decisions early in your investment journey.

 

[moses]

Ahhh - now you are muddying the waters - what might make a great IP will not always be the place you'd want a PPOR. Don't mix investing decisions with personal lifestyle decisions early in your investment journey.

I'm paying VERY low rent right now where i am (as house is owned by family members) .. would you suggest buying another investment & renting it out for a few years, and me continuing to rent would be a good option for a while?

i've considered this also, as i dont HAVE to move - it was just a luxury i'd envisioned the nsw guy living the qld dream !

 

[Propertunity]

I'm paying VERY low rent right now where i am (as house is owned by family members) .. would you suggest buying another investment & renting it out for a few years, and me continuing to rent would be a good option for a while?

It is almost always better, from a pure investment decision, to live as cheaply as possible yourself, while spending your money on investments.

 

[moses]

It is almost always better, from a pure investment decision, to live as cheaply as possible yourself, while spending your money on investments.

i appreciate the insight, thats helpful

i wish i'd bought some more around western sydney a few years ago.. hindsight is terrible isnt it !

 

[moses]

since i've already purchased a unit.. would you suggest a house for the next investment?

is there any negatives to buying a 2nd townhouse/ unit .. other than paying 2 sets of strata rates?

or can it be a good idea also?

 

[datto]

moses, I think you could part the waters and buy a house.........in the Druitt!

I believe the eleventh commandment was "thou shalt not sell up in the Druitt to buy interstate"

your call, but I've got Mt Druitt tattooed on my butttocks

 

[moses]

i haven't got to the buttocks tattoo yet, but if the 2770 continues to flourish, its a high possibility that i too, will have the buttocks tattoo.

 

[fresh investor]

Just a question regarding serviceability.

When a lender calculates your ability to service a loan they take into account the rental income from your IP. So wouldn't selling the IP in the druit infact lower your total borrowing amount with certain lenders?

Unless you had alot of equity release from selling giving you more money to put into the brisbane one. In this case wouldn't you be better off refinancing and drawing down on equity as previously suggested?

 

[see_change]

Just a question regarding serviceability.

When a lender calculates your ability to service a loan they take into account the rental income from your IP. So wouldn't selling the IP in the druit infact lower your total borrowing amount with certain lenders?

Unless you had alot of equity release from selling giving you more money to put into the brisbane one. In this case wouldn't you be better off refinancing and drawing down on equity as previously suggested?

Different lenders have different models and will only take into account a percentage of the rental income .

That's why I'd talk to a mortgage broker.

Cliff

 

[my03]

If history repeats, Druitt and surrounds will go up heaps (as it has in recent years), and fall then go sideways as everyone on here says.

It still looks like theres so legs in this growth phase. Are people who are invested in Druitt looking for a exist strategy or do they usually buy and hold? Also can anyone point out any fundamental factors that would lead to a fall in capital values in the near future? obvious one would be interest rates, but would a rise in interest rates really have a big impact on demand? I mean where else are they going to buy? Druitt is pretty much at the bottom of the price range.

What were the causes of the fall in capital values in the last periods of decline? how are things the same or any different?