My portfolio

Which property should I sell?

  • None of them

    Votes: 15 71.4%

  • Property A

    Votes: 0 0.0%

  • Property B

    Votes: 0 0.0%

  • Property C

    Votes: 0 0.0%

  • Property A and B

    Votes: 0 0.0%

  • Property A and C

    Votes: 0 0.0%

  • Property B and C

    Votes: 0 0.0%

  • All of them

    Votes: 6 28.6%
  • Total voters
    21
R

ReinDeer

Hi, I am new to this forum and would like some advice on my portfolio. 3 of my properties are high rise apartments in Haymarket and Zetland:

Property A - Haymarket
Bought in 1992 for 220K
Current value around 670K
Strata - 1900 per quarter
Rent - $670 per week

Property B - Haymarket
Bought in 2010 for 565K
Current value around 730K
Strata - 1700 per quarter
Rent - $740 per week

Property C - Zetland
Bought in 2013 for 610K
Current value around 735K
Strata - 1200 per quarter
Rent - $630 per week

The total value of these 3 properties is around half the value of the overall portfolio. I heard that there are oversupply problems in those two suburbs but I also think that they have their potentials.

The properties are almost fully paid off, so I don't have problem servicing them. I am early 40s and I am planning to use the rents as income for retirement.

Should I sell some of them and buy other properties?
 
If you were to sell these 3 and then buy 3 more for the same value in alternative locations, please calculate:

Capital gains tax payable.
Selling fees payable - agents and legal.
Buying fees payable - stamp duties and legals.

Add all those up and see what it comes to, then see if you think you can regain this buy purchasing replacement properties.

Sometimes it's best to stick with what you've got.
Apart for the high strata fees, you seem to be doing very nicely.
 
ReinDeer said:
Hi, I am new to this forum and would like some advice on my portfolio. 3 of my properties are high rise apartments in Haymarket and Zetland:

Property A - Haymarket
Bought in 1992 for 220K
Current value around 670K
Strata - 1900 per quarter
Rent - $670 per week

Property B - Haymarket
Bought in 2010 for 565K
Current value around 730K
Strata - 1700 per quarter
Rent - $740 per week

Property C - Zetland
Bought in 2013 for 610K
Current value around 735K
Strata - 1200 per quarter
Rent - $630 per week

The total value of these 3 properties is around half the value of the overall portfolio. I heard that there are oversupply problems in those two suburbs but I also think that they have their potentials.

The properties are almost fully paid off, so I don't have problem servicing them. I am early 40s and I am planning to use the rents as income for retirement.

Should I sell some of them and buy other properties?
Click to expand...
Imho, draw down equity and re-invest with higher yield instead of selling..

Tax and cost will kill the profits.. And you will not close to your goal "rent as income"

Nice work btw..
 
spludgey said:
Very low yield, not my cup of tea, so I would sell all of them.
Click to expand...

Same here, but I would never have bought them in the first place.:p

Look, at the end of the day, nobody can tell you what to sell & what to keep as we all look for different things, have different risk profiles, income etc.

Personally I like a higher yield, and less expenses. You obviously highly value Inner City properties, so are happy with a lower yield & those nasty strata fees. If they're fully paid off, then there probably isn't a need to sell any either, and you've only given us half the information as you state that this is half the value of your portfolio. So, you, and only you, need to sit down & work out if they fit into what you want from your portfolio.
 
Thanks for the comments and suggestions. :)

The other half of my portfolio contains units, villas and apartments in Lidcombe and Penshurst area. The strata is about one week rent for these properties.

My strategy is buy and hold and I am just a bit worry about the oversupply in Zetland and CBD area, but it seems I should keep all the properties due to CGT, stamp duty and other transaction costs.
 
Congratulations on a high capital growth portfolio! I'm with others in this forum, I'd say hold on to them all. In two years when all the constructions complete and flood the market, your values may wain a little, but give it a couple more years after that, and they'll pick back up again.
 
dan_89 said:
Sounds like a great portfolio to me! Congrats!
Click to expand...

Its beyond me how someone can think that with those yields, and exorbitant strata fees, it makes for a "great" portfolio...nothing surprises me anymore from 'investors'..
 
Last edited:
You have done well so far.

I don't generally like units/villas but they work for others and you have done well. Selling one or two and diversifying into something else (cash, index funds, house's somewhere else) could reduce your overall risks and increase cashflow - this could help you retire earlier.

Note: Body corp fees and sinking funds will only increase thus decreasing your retirement income

How is your NSW land tax situation? Selling some would also be likely to reduce your overall land tax bill!
 
The growth has been great. Take the money and run

Yields too low, I would sell them all and move on to something that will provide higher income and perhaps properties with potential to develop, once again ability for growth and generate much higher income.
 
MTR said:
The growth has been great. Take the money and run

Yields too low, I would sell them all and move on to something that will provide higher income and perhaps properties with potential to develop, once again ability for growth and generate much higher income.
Click to expand...

thumbs up. Finally some common sense!
 
I would love that rent coming in with almost no debt, but it would hurt to be paying those strata fees every quarter.

You've made great profit on property A due to holding time, and the values will no doubt continue to increase. I wouldn't sell to buy another similar property, but one thing to think about would be to sell and take the profit you've made in, say, property A. You will pay a lot of capital gains tax, but if that is the only property you sell in one financial year, you could fix any other loans you have and prepay some interest to offset the gain. Prepay your rates too if it helps.

You need to be careful that prepaying next year's interest in the year you sell doesn't stuff up your cash-flow for the following year, but this would all be looked at by your accountant or adviser.

If you do decide to offload these and put the money into a different type of asset (house and land, subdivision potential block, shares...) then you could plan it so that you sell one per tax year whilst minimising the tax.
 
LeoT said:
Its beyond me how someone can think that with those yields, and exorbitant strata fees, it makes for a "great" portfolio...nothing surprises me anymore from 'investors'..
Click to expand...

Great growth in relative hold time.
Would have near constant tenancy.

Almost paid of will give great cashflow with minimal risk.

Selling would trigger capital gains tax and other fees.
I'd leverage against them and start developing using the rental income to cover holding costs.

That's a great position to be in, especially at early 40's!
 
nhg said:
Great growth in relative hold time.
Would have near constant tenancy.

Almost paid of will give great cashflow with minimal risk.

Selling would trigger capital gains tax and other fees.
I'd leverage against them and start developing using the rental income to cover holding costs.

That's a great position to be in, especially at early 40's!
Click to expand...

Nhg it IS a great position to be in for early 40s, but that doesn't make the portfolio a great one. Not with those strata fees IMO.
 
My two cents worth - you say that they are almost paid off ? Why would you sell them and invoke a CGT event ?
Draw down equity and buy new ones (sure) and then start to pay them down with higher yields. The rents might be low now, but who knows in 2, 5 and 10 years time what they might rent for.
i have NEVER met anyone who didn't regret selling a property unless it was sucking them dry for money. You say these are doing ok, so why sell the golden goose if its not hurting you ? Keep them, draw equity and buy again. yes !
 
If you can afford to buy more, why sell?

What's wrong with drawing the equity to buy some more with new loans?

Even if you are moving to high yield or to houses, there is nothing wrong with your portfolio being diverse - quite the opposite in my opinion.

Once you spreadsheet the costs in selling and re acquiring you can see how much will be lost.

Others may disagree and try to switch the portfolio around, it's up to your own style.

Personally I've never sold anything since my first in 2001 and some of them are not the kind I would buy today, but over time they have changed into good assets.
 
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