Never Sell?

[Rixter]

Very clearly. I never stop learning from people on this forum.

Thanks a lot for the idea.

Not a problem srini. glad to help people who are open to increasing their knowledge level.

This method works very well for increasing your asset base and also increasing your number of lenders thereby minimising your exposure risks to them. Not only can you release your ppor title deed but you can also release other IP/s title deeds and take them across to different lenders as security to borrow and leverage against.

I hope this helps.

 

[Dazz]

There is nothing wrong with taking profits

Agreed. Selling is an option at any time.

the only alternative is to borrow “your profits” which in my view is a recipe for disaster. But yet people love that strategy, go figure.

No, that is not true. That's Living Off Equity, and you have described and calculated it very well in your later posts.


However, there is a 3rd, dare I say it, better alternative to selling and LOE.....most of the older folk here on the forum know it well, it's called LOR, or living off rent.

That method (LOR) assumes nothing about interest rates, nothing about growth rates. She's just collect the rent and go spend it on whatever takes your fancy. Forget capital growth - not necessary.

 

[Monopoly]

That method (LOR) isn't concerned about interest rates, or about growth rates. She's just collect the rent and go spend it on whatever takes her fancy. Forget capital growth - not necessary.

Slight modification (if I may) Dazz to your well described LOR strategy.

Life's good....

 

[natedog]

Hi All,

After having for so long believed the never sell anything mantra,this changed completely when the opportunity to build a new PPOR on a block of land that came out of the blue...

We decided to sell 1 property....encouraged because what i thought it was worth was less than we could actually get (according to the agent) and he was right!!

Its funny, i help justifying to myself selling it by knowing that the new home will be worth double the one we sold...so even though we sold a property....our total asset base is larger...and we have some $$$ in the bank to fall back on, or reinvest, or buy some blinds....landscape etc

Accumulating assets is important....but i am starting to realise that quality of life is moreso.

so if offloading an asset can add to your life, then i say sell....wow, never thought id say that out loud ,

cheers,
Nathan

 

[Wilko]

That"s a good read, so many points,This is so where I am atm. Everywhere I look/turn its don't sell don't sell,hold hold hold. From a youngish investors point of view, I've always though turn the properties over until you own your own house,finally there tomorro with a settlement, happy days. Well so its mortgaged, for other investments, but so there is no un claimable interest. now what to do next, do I still turn over if I am doing reno's /strata titling and new builds, do I keep some, I plan on turning them over still,but putting proceeds into new build rental house/s, to get good depreciation off the new dwellings. My dad is the biggest fan of hold never sell, but he has never done reno's/strata titling. Just buy and hold,and was maxed out with the last boom in 2007ish. From his point of view he says you miss out on all the capital growth, In my defence I always buy with in 2months of selling,so my opinion is the capital growth is spread amonst the projects. Add beers and the same conversation comes up, broken record, its terrible..hahah. I would like to get a view from other investors,not only to arm my self next time I have a beer with my old man, but as I want to get where I'm going as fast as I possibly can, time to get serious

 

[PropertyDave]

Srini, providing you have sufficient LVR with the lender your IP/s are financed with, transfer/refinance the debt currently on your ppor over to your IP/s for security and the need for your ppor as security is no longer required. The lender now gives you your ppor title deeds for safe keeping.

Are you able to transfer that currently non-deducitble PPOR debt to become deductible IP debt via refinancing?

I have been told by a bank mortgage lender manager that the ATO won't allow that.

 

[Rixter]

Are you able to transfer that currently non-deducitble PPOR debt to become deductible IP debt via refinancing?

I have been told by a bank mortgage lender manager that the ATO won't allow that.

The method I described above is used for releasing your PPOR title to you, however for the question you are asking, my understanding is it may be achieved via debt recycling. I suggest you read up on it for further clarification.

I hope this helps.

 

[PropertyDave]

The method I described above is used for releasing your PPOR title to you, however for the question you are asking, my understanding is it may be achieved via debt recycling. I suggest you read up on it for further clarification.

I hope this helps.

Thanks for that, I will be sure to look into it further.

 

[investor2009]

I'm a big fan of the original concept of never sell, but have recently sold something..

ONLY because we needed to do so because the banks were not willing to lend any more money, so like another poster here mentioned: we sold one to add a property of double the value of the previous one so our assett base is nw larger than it was without selling. So there are golden rules to the exception. But if you're just selling for the sake of it and repeatively buying property of the same value or spending the profits on junk then you are most probably going backwards.

 

[Tin Tin]

I think that some people get caught up in the idea that they 'have' to have more and more properties untill they are up to thier eyeballs in debt, living a spartan existence and wondering how to get over the 'serviceability issue' or 'wall; that we all hit.

Or waiting until the next Property BOOM nto realise the fruits of their labours

Sometimes it seems you may be better served to take some of your profits, maybe cut loose an underperforming property or look at the advantages of adding value to your PPoR and selling it at a premium and moving into the next "doer upper" PPoR for the tax breaks, and once again adding value?

"Never Sell" it would seem, has it's limitations, both with property and shares/managed funds, sometimes it may be prudent to sell to realise a profit and move the monies into a better performing investment, selling and buying in costs considered


And as a topic for discussion...What do you think?

Never Sell?

I used to preach never selling but changed my tune as I opened up my mind and listened to other opinions. There is no use holding onto something if the market is going nowhere and it is costing you money every month. I sold a unit recently to buy something else and am looking to offload another property as it probably wont move on price for a few years. Things in life pop up like kids, failed businesses (I am in this category) and other opportunities.

 

[our obsession]

Redwing:

And as a topic for discussion...What do you think?

Never Sell?

Along the line of, 'whatever takes me closer to my goals', my intention was to build the foundation of assets, then to review and see best possible use of equity, due to making money when I bought initially, this has all come around sooner, rather than later. Time does fly when you are having fun.

Residential property has been a wonderful springboard for me. There will be some selling, already done some reshuffling, refocusing, more to come.

 

[Doovalacky]

Another thing to consider is age of the building and what the suburb is doing.
My 1st IP was in a decent area, but after 6 years rents stagnated as it was only a 3x1 and new suburbs had opened up.
Renovating had too little return at the time to warrant the cost.

While it took almost 18months of heartache to rebuild what I could have brought existing had the same issues of age and low returns.

The IP became my residence and I sold the wooden shack I had been living in.