We're about to build a new PPOR which will add around 500k to our mortgage. We're also about to have bub number two and my partner and I would like to work three days per week until the kids go to school (of course plans could change). The reduced salaries will decrease our borrowing capacity.
We have five IPs - two that we've recently built that have a good rental return and good depreciation, two older properties (with negative equity), average returns and very little depreciation left and one property that's breaking even, but has been rezoned so it is now a five (potentially six) unit site.
The rezoned property has about 200k equity. Since that property is now breaking even, there are no tax benefits to be had. Originally we were holding to subdivide and build, however because of our reduced income and larger PPOR mortgage, I doubt we'll have the income or borrowing capacity to achieve this in the next five years.
Therefore, I'm thinking of selling the rezoned property and paying down the PPOR. We could then get a LOC against the PPOR to buy another investment property, thereby shifting our non-deductable debt to deductable debt.
We're also waiting on land titles for the two newer properties. When they come through, we'll probably see a broker to untangle our cross collatorisation mess we're in.
I think selling the rezoned property to pay down the PPOR is the right thing to do, but I have it in my head (and due to past experience)....'never sell property'.
Thoughts...
We have five IPs - two that we've recently built that have a good rental return and good depreciation, two older properties (with negative equity), average returns and very little depreciation left and one property that's breaking even, but has been rezoned so it is now a five (potentially six) unit site.
The rezoned property has about 200k equity. Since that property is now breaking even, there are no tax benefits to be had. Originally we were holding to subdivide and build, however because of our reduced income and larger PPOR mortgage, I doubt we'll have the income or borrowing capacity to achieve this in the next five years.
Therefore, I'm thinking of selling the rezoned property and paying down the PPOR. We could then get a LOC against the PPOR to buy another investment property, thereby shifting our non-deductable debt to deductable debt.
We're also waiting on land titles for the two newer properties. When they come through, we'll probably see a broker to untangle our cross collatorisation mess we're in.
I think selling the rezoned property to pay down the PPOR is the right thing to do, but I have it in my head (and due to past experience)....'never sell property'.
Thoughts...
