when to SELL in Sydney?
- Thread starter moses
- Start date
Some differ in opinion and like to "take profits"
But trying to pick the top is impossible. You are either picking before the top or after the top, and if it's after the top then it's not a sellers market anymore.
My personal opinion is never sell unless it's a lemon.
The average boom year increase is more than the average bust year decrease, and when you sell you give away part of your profits to the REA, and the taxman.
You are also flushing down the drain that $30k stamp duty you've paid if you sell, as you have to pay it again when you replace the property later.
In short - you have to be damn sharp to capture that 5-10% decrease in price during a downturn as a profit.
But trying to pick the top is impossible. You are either picking before the top or after the top, and if it's after the top then it's not a sellers market anymore.
My personal opinion is never sell unless it's a lemon.
The average boom year increase is more than the average bust year decrease, and when you sell you give away part of your profits to the REA, and the taxman.
You are also flushing down the drain that $30k stamp duty you've paid if you sell, as you have to pay it again when you replace the property later.
In short - you have to be damn sharp to capture that 5-10% decrease in price during a downturn as a profit.
It's hard to pick the top of the market. I sold a house towards the end of last year, but if I'd held on could have gotten probably another $100k for it. I've got a unit selling now, and will have a house selling in the new year.
Personally, I think there's still a way to go, but you can never be too sure, and I'm of the opinion that you never go broke taking a profit, so I'm happy to not be too greedy and to let someone else to get any additional gains. Plus, I've got to split the sales into different financial years.
I've experienced holding out too long at the end of the last upsurge, and as unloading a few properties are part of my retirement plans, this lot is going NOW. I'm not risking holding out this time around.
Mind you.....if it keeps this up, a couple of others that weren't earmarked for removal might find themselves going in Spring 2016. It all depends on the numbers.
There's many reasons to sell. What works for you, may not be the best move for someone else. We are all at different times in our journey, and employ different tactics.
As for me......I've got a heap of properties just sitting around, they've done their job & it's time they moved aside, so out, out, out they go!
What will you do with the net proceeds ?
I think a lot of us are going through the same decision.
If you are planning to reinvest in another property - then you are perhaps 15% down from the get go.
The west might get another run with the airport construction - so we will probably keep that one.
Sell if your going to use the cash for other investment that will have higher or better CG....if your going to sell and the it's just gonna sit there as CASH or in your offset account that's pointles....Cash has no CG.
Depends what you are going to use the funds for. If you do sell the property you need to decide if the relevant costs are relevant to you and how much it will cost.
1) Capital Gains Tax
2) Agent Fees
On the ABC news tonight I saw the capital growth in percentage terms for all capital cities in the last 10 years. Sydney grew 58%. Melbourne grew 83%. There were a couple of 100%. Not sure how accurate this is or even if I read it right, but if true, it might show Sydney might have a bit more growing to do. I remember the 90's and early 00's Sydney properties went though the roof. Then growth slowed wile other areas caught up. Sydney could have more legs in it yet.
1) Capital Gains Tax
2) Agent Fees
On the ABC news tonight I saw the capital growth in percentage terms for all capital cities in the last 10 years. Sydney grew 58%. Melbourne grew 83%. There were a couple of 100%. Not sure how accurate this is or even if I read it right, but if true, it might show Sydney might have a bit more growing to do. I remember the 90's and early 00's Sydney properties went though the roof. Then growth slowed wile other areas caught up. Sydney could have more legs in it yet.
When selling down your portfolio, how do you determine the sequence?
For instance, I've got 4 units in Sydney purchased from 2009 onwards. Do I start with selling the unit I've held the longest? They're all roughly the same LVR as I pulled out equity to purchase interstate and also into the sharemarket.
For instance, I've got 4 units in Sydney purchased from 2009 onwards. Do I start with selling the unit I've held the longest? They're all roughly the same LVR as I pulled out equity to purchase interstate and also into the sharemarket.
Assuming they are pretty much the same units with the same value you sell the unit that you bought for the most so to reduce your capital gain (unless you have held it for less than 12 months). If you have held the unit for less than 12 months than either wait till you have held that unit for 12 months or work out the unit which will give you the least amount of CGT liability.
Assuming it's a fairly standard place (not budget or prestige )..
Conservatively, I would be waiting at least until spring this year. Peak selling season, probably another rate cut (or two) and ever lower numbers of dwellings on the market.
Aggressively, I'd expect mid year 2016 (or later, depending on rate movements) to be even better.
But the crystal ball is not perfect.
Conservatively, I would be waiting at least until spring this year. Peak selling season, probably another rate cut (or two) and ever lower numbers of dwellings on the market.
Aggressively, I'd expect mid year 2016 (or later, depending on rate movements) to be even better.
But the crystal ball is not perfect.
The first thing to determine, is "Is selling right for your purposes?" If the answer is 'yes', then I would look at all the units and determine if you want to sell one, two, three, or all of them.
If you only want to sell one, then I'd look at a combination of things. Is one more of a 'dog' than another? How much is owing on each of them? The original purchase price & possible CG. Will I have to pay more CGT on one than I will on another? What will I be doing with the funds?
The one you've held the longest may possibly have the least debt and the most CG. It might be prudent to sell the last in, so long as you've held for 12 months, and pay out the first one with the gain. Of course, that's assuming that this is what you want to do with the funds.
If you're wanting to get rid of two, then you might look at spreading the sales over two financial years, so one now, and one in spring. Again presuming that you are wanting to sell soon.
There really is a lot to consider, and each person will look at it differently.
Hi
Hi,
Some people love to hold on the properties because they feel that's what suits them and some say sell. Who is right? None of us it all depends on what are you are planning to do....
For me personal, I have a mix... I had a place in St Albans where I bought it for 185K and two and half years later, I sold it for 320K (4 years ago).
The house is only worth about 340K to 350K in todays market.
So I did the right thing by selling in a area that was booming....
Just ask your self this, one you sell the property what are you going to do with the cash?
Hi,
Some people love to hold on the properties because they feel that's what suits them and some say sell. Who is right? None of us it all depends on what are you are planning to do....
For me personal, I have a mix... I had a place in St Albans where I bought it for 185K and two and half years later, I sold it for 320K (4 years ago).
The house is only worth about 340K to 350K in todays market.
So I did the right thing by selling in a area that was booming....
Just ask your self this, one you sell the property what are you going to do with the cash?
In this cycle, thinking to just sell one. The one in my wife's name when she goes on maternity leave which we can also claim a partial PPOR exemption on. Funds will be used to clear our current PPOR's debt (YAY!) and purchase some incoming producing shares.
The property itself is a massive dog but luckily in a high demand low supply suburb.
Will look to sell another one or two during the next cycle to purchase more incoming producing shares and declare myself retired!
Hi, newbie question, what are the advantages of splitting the sales into two separate financial years?
To keep below a certain tax bracket.
Imagine the following scenario:
Salary: 80k
IP1: 65k profit
IP2: 65k profit
If you only sold IP1 you'd be below the 150k bracket and pay 30% tax instead of 40% if you sold both (I'm making up the numbers here, I forgot what the thresholds / rates are).
So investors will stagger the sales out.
CGT is calculated on your regular PAYG rates. So splitting sales over 2 FY's may save bumping you into paying a high rate of marginal tax when the CG from property/s is added to your income in any particular year.
Ahem, that is NOT the definition of a dog property.
My bad. It's probably one of the worst units in the suburb so I thought that counted for something
