Hello everyone ! I am currently reading books/forums to build my knowledge in property investment. This forum (ie you guys) is AWESOME !! I am learning sooo much. I work part time in IT and earn well but am very disillusioned with my job (and the corporate life in general) and looking to get out and start something from home (so I can spend more time around my young kids aged 5 and 2).
Hubby and I built our first PPOR in 2002, lived there for 4 years, then made it our IP and have rented it out for the last 6 years. We rented elsewhere for 2 years, and then bought our current PPOR in 2008. I am now pondering selling our IP, considering it will be CGT free up to the 6 year point, and put the gains into current PPOR offset account before embarking on journey to purchase a number of IPs that meet our longer term goal of financial independence. I am not sure if this is the right step, considering hubby is of the view to buy and hold forever.
I just think it is the "right time" to sell because:
1. We have held it for 10 years, the value has doubled and I feel we should release this CG now whilst it is tax free
2. house is still in "immaculate as new condition" as we have had all superb tenants over the years so will get good $$.
3. Land is only 450sqm so no further dev potential
4. Generally steady market at the moment (stock is reasonably priced), so can easily re-enter the IP game with a number of properties over the next 12 months
5. It gives us the ability to reduce non ded debt to 0
6. The 'feel good' factor of having no debt on PPOR
Reasons to not sell:
1. good gross rental yield approx 7.5% with scope to increase rent by atleast $20
2. Only been vacant for 1 week in the last 6 years
3. good CG area (Castle Hill NSW)
4. heaps of equity in current ppor, so dont really need to sell to access funds for new IPs
Here are my numbers:
IP on IO loan: owing $500k (333k tax deductible, 167 non-ded split added when we bought current PPOR), market value approx. $830k, rented for $750/week
PPOR on P/I loan: owing $325k, market value approx. $800k
Offset balance $50k
Income $10k/month (will drop to $6.5k IF I can convince hubby to let me be a SAHM/WAHM).
So if we can get close to market value, it would sufficiently cover our PPOR mortgage (minus sell costs).
Hubby has been made redundant twice in the past 6 years and hence is very stressed about financial security (which is why he wants me to keep working). I feel that selling the IP and paying down loan would put him at some ease and give him confidence to start actively pursuing IPs this year.
I think we will be making current PPOR into IP for a few years before moving back in and doing major reno. So will keep funds in offset.
Sorry for the long post. I just need some further input of reasons to sell/not sell.
Hubby and I built our first PPOR in 2002, lived there for 4 years, then made it our IP and have rented it out for the last 6 years. We rented elsewhere for 2 years, and then bought our current PPOR in 2008. I am now pondering selling our IP, considering it will be CGT free up to the 6 year point, and put the gains into current PPOR offset account before embarking on journey to purchase a number of IPs that meet our longer term goal of financial independence. I am not sure if this is the right step, considering hubby is of the view to buy and hold forever.
I just think it is the "right time" to sell because:
1. We have held it for 10 years, the value has doubled and I feel we should release this CG now whilst it is tax free
2. house is still in "immaculate as new condition" as we have had all superb tenants over the years so will get good $$.
3. Land is only 450sqm so no further dev potential
4. Generally steady market at the moment (stock is reasonably priced), so can easily re-enter the IP game with a number of properties over the next 12 months
5. It gives us the ability to reduce non ded debt to 0
6. The 'feel good' factor of having no debt on PPOR
Reasons to not sell:
1. good gross rental yield approx 7.5% with scope to increase rent by atleast $20
2. Only been vacant for 1 week in the last 6 years
3. good CG area (Castle Hill NSW)
4. heaps of equity in current ppor, so dont really need to sell to access funds for new IPs
Here are my numbers:
IP on IO loan: owing $500k (333k tax deductible, 167 non-ded split added when we bought current PPOR), market value approx. $830k, rented for $750/week
PPOR on P/I loan: owing $325k, market value approx. $800k
Offset balance $50k
Income $10k/month (will drop to $6.5k IF I can convince hubby to let me be a SAHM/WAHM).
So if we can get close to market value, it would sufficiently cover our PPOR mortgage (minus sell costs).
Hubby has been made redundant twice in the past 6 years and hence is very stressed about financial security (which is why he wants me to keep working). I feel that selling the IP and paying down loan would put him at some ease and give him confidence to start actively pursuing IPs this year.
I think we will be making current PPOR into IP for a few years before moving back in and doing major reno. So will keep funds in offset.
Sorry for the long post. I just need some further input of reasons to sell/not sell.
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