Substituting Property (which order?)

[Mushu Eddie]

Looking to sell a poor performing townhouse in south east melbourne's Lynbrook & utilize money into a better returning property in terms of both CG & yield. It's on a fixed interest loan with 2 years remaining, so by substituting to another property I avoid the breaking penalty costs.

Would it be wiser to sell the existing property first so i can use the sale funds to cover the deposit & buying costs on a new purchase?

The property is now vacant (has been for 2 months) & i'm missing out on cash flow but will it be easier selling the property with no current tenant in place or should i look for a month to month tenancy in the mean time?

 

[Rolf Latham]

Ensure your loan and lender allow portability

Sell the existing and have a new place ready to settle the same day

Most bank based lenders will allow a deferred settlement with the old place settling first and hold your cash to secure the loan

Challenge is that the loan repayments still need to be made so often the net revenue position of a deferred port is not sensible

Don't make assumptions and get the data from ur lender

Ta



Rolf