When to sell?

[JohnA]

I am renovating an IP that will be finished in realistically 8 weeks time. It has been an ongoing project for the last 12mths - in hindsight lots that I could have done differently.

The situation is I don't know whether to sell it or rent it out. And some of you will say it depends on my end game or strategy. I have worked out my goal but not the strategy so I don't know what to do and time is running out to decide.

If I sell I will have 65-70k (conservative est) after CGT which I can use to pay down my PPOR debt (currently 200k).

If I rent the property it may be positively geared by about $10 per week - so if rates etc increase more than rents or Ir go up this position is lost.

A recent report indicates 0-2% growth in the next 8 years.

Do I sell because growth is low, pay down PPOR and use the equity to reivest in a higher growth property?

Do I rent, hold / hope the predicted growth is wrong, use equity to invest in other properties?

Has anyone been faced with a similar decision and what did you do and why?

 

[wobbycarly]

If I sell I will have 65-70k (conservative est) after CGT which I can use to pay down my PPOR debt (currently 200k).

Personally, it's taken me a long time to move on from "never, ever sell". I would do this [if it was me!]

 

[savoys]

I am renovating an IP that will be finished in realistically 8 weeks time. It has been an ongoing project for the last 12mths - in hindsight lots that I could have done differently.

The situation is I don't know whether to sell it or rent it out. And some of you will say it depends on my end game or strategy. I have worked out my goal but not the strategy so I don't know what to do and time is running out to decide.

If I sell I will have 65-70k (conservative est) after CGT which I can use to pay down my PPOR debt (currently 200k).

If I rent the property it may be positively geared by about $10 per week - so if rates etc increase more than rents or Ir go up this position is lost.

A recent report indicates 0-2% growth in the next 8 years.

Do I sell because growth is low, pay down PPOR and use the equity to reivest in a higher growth property?

Do I rent, hold / hope the predicted growth is wrong, use equity to invest in other properties?

Has anyone been faced with a similar decision and what did you do and why?

hi john,

yes, have faced a similar decision, and decided to hold, and looking at fixing IR.

Even if some reports say no expected growth in the short term in this particular property, if I was looking at buying another in expected growth area, what if it's wrong, ? already behind with re commission , tax and costs.

Depends of course if your other idea is to pay off the PPOR, is better for you!

good luck

 

[Brady]

I am renovating an IP that will be finished in realistically 8 weeks time. It has been an ongoing project for the last 12mths - in hindsight lots that I could have done differently.

The situation is I don't know whether to sell it or rent it out. And some of you will say it depends on my end game or strategy. I have worked out my goal but not the strategy so I don't know what to do and time is running out to decide.

If I sell I will have 65-70k (conservative est) after CGT which I can use to pay down my PPOR debt (currently 200k).

If I rent the property it may be positively geared by about $10 per week - so if rates etc increase more than rents or Ir go up this position is lost.

A recent report indicates 0-2% growth in the next 8 years.

Do I sell because growth is low, pay down PPOR and use the equity to reivest in a higher growth property?

Do I rent, hold / hope the predicted growth is wrong, use equity to invest in other properties?

Has anyone been faced with a similar decision and what did you do and why?

Still sounds like your coming out ahead.

Is holding onto a property that you dont think has much potentional to grow going to slow down your future plans for investment.

If you have netted ~$70k in 12months, why not sell realise your profit and use those funds for your next purchase/reno if thats what your still wanting to do.

You made comment that you would/could/should of done things differently, maybe next time you are able to do things smart/cheaper/quicker lowering your holding cost and ultimately more profit $$

goodluck either way, tough decisions are great fun!

 

[Melbournian]

Would just cash in and put to reducing the ppor debt

 

[JohnA]

Thanks Melbournian

I have an agent giving us a guestimate tomorrow. If it is above our set figure then we sell - if below we probably rent it. It is a tricky one to try to ascertain market value.

 

[JohnA]

Thanks Brady

70k in 12 mths doesn't sound to bad.

It has been a huge headache though. My wife was supposed to have 12mths time off for herself - to rejuvinate after having the kids and all the ivf and so forth beforehand. To take a little time for herself before heading back to work. Instead she has had the stress of this reno and the time effort and stress and lack of quality time with the kids - the profit would have been equal to her going back to work full-time. I have also used a large amount of my long service leave to get the reno done and have been stressed and when wife is unhappy well .... And our kids have missed out on quality time too.
When in challenging times we reflect on decisons and choices we have made and we certainly fluffed this one up (picked the wrong tradie - finished 3mths after promised which started the nighmare!). We are wiser though and hopefully will make better choices moving forward. As for my wife - unfortunately for my wife to have the time off she was looking forward to it means she would have to resign as her family leave period is coming to an end. No job also means reduction in borrowing capacity - so she is going back to work with the end goal in mind.

On this forum you read so many great achievements and successes and it is truly inspirational and gives me hope that we too can achieve our goals. What is not said or rarely posted is the hard times, the challenging issues and how people managed to overcome them and stay focussed on their end goals.

 

[matto_]

As you rightly point out - depends on your strategy.

If your strategy is to stay in property investing - do you think you will be able to find a better property out there than the current one.

Other consideration is the current point in the property cycle. One would definitely argue that it is a buyers market.

May be worthwhile holding on for a bit and selling into a stronger market?