Sell PPOR for IP??

Hi All,

Just wanting some advise. I am 26 and have a PPOR in Brisbane and a new IP in Toowoomba which is neutrally geared. Based on bank valuations and market values if I sold my PPOR in Brisbane I could potentially walk away with $200k after paying out my mortgage.

It is getting difficult for me to buy a third property as I am on a single income and with a $500k loan for my PPOR and a $400K loan for my IP. I am still able to save around $700 each week for a deposit for a second IP, however, I am thinking it may be wiser to sell my house - walk away with $200k and potentially buy 2 or 3 properties that are cheaper and positively geared (or very close too) and I can go and rent somewhere. That way I have more properties and all my loans are tax deductable.

If you were in my position would you sell and use the profit to buy 2 or more IP's - or would you stay put as my PPOR is in a very good area (Gumdale) and has attracted considerable capital growth in the last 12-16 months. Keeping in mind I do not pay Capital Gains tax in my PPOR and it could potentially double in the next 10-15 years.

Any help / advise would be much appreciated.
It would generally cost you 7 to 10% to sell and buy again. Higher cashflow generally means lower growth so you are potentially sacrificing tax free capital gains by this strategy. Have you also worked out the land tax consequences?

Done any projections for capital gains and cashflow?
Have you spoken to a broker regarding your borrowing capacity? The ability to save $700wk gives the impression that there is still a lot of capacity available, which in combination with your equity position should allow you to leverage into more property.

Have a chat with a investment savvy finance broker who can let you know exactly whats possible and what you need to do to achieve your goals. :) There's plenty on this forum who are happy to assist.
Cjay's on the money.

You may have options available to you that you don't realise right now. Particularly with that level of equity and ability to save.


Thanks for the comments guys. I rent out 3 bedrooms which allows me to save the $700 min each week plus pay my mortgage repayments of $680. However, as my broker has informed me, the banks do not take this rental income into account as it is not declared.

As my broker stated in an email:
"If you needed to pull some equity out down the track to help fund the next property, we could certainly look to do it but would likely need to switch from xxxxxxxx to a different lender.

Waiting 6-12 months will definitely assist us with capital growth and also to help bolster your own cash savings. Like we did for the Toowoomba property, I recommend having at least 10% deposit plus costs to avoid exorbitant mortgage insurance premiums.

Based on your current income and projections, we should be right to borrow for a third property but after that, you will either need to get a nice pay rise, keep pushing up your rents or find a girlfriend with a good paying job!"

I feel as though having such a big PPOR with a high mortgage my by hindering my option. The other option is to rent out my PPOR and then also buy a third. But taking the money and running is also tempting.


I could be wrong but if you are renting out some rooms and earning an income your PPOR might not be all tax free since its earning an income... Best to talk to an accountant.

What is your goal in terms having more and more IPS? Also I have learn that its not about having SO many IP that count its the quality you have.

We just paid off our PPOR in April two weeks after my 30th and we have a couple of IPS. Once we paid off the PPOR the sky is our limit...

Dont rush into buying more maybe look at reducing your current debt on your PPOR..