Whether I should sell

[Helenr]

Hi all

I have been new here but after browsing through the posts for a few times I have learnt a lot which I did not even think of before. At the moment I hold several IPs which are all apartments in Sydney and I bought them all through Off-the-plan. I know off-the-plan is always the last option down the list but I bought them with a rush just in order to get the first home owner staff done.

At the end of last year, the Sydney market turned around and increased a lot in value which affect my IPs as well.

IP1-my home at present- 2bedder (1year young) in Strathfield went from like 420k to around 500k

IP2-2bedder (1year young) in Parramatta went from 420k to maybe 500k (that was the price above my unit sold for)

IP3 -3bedder in Killara (will be settled around June next year) for 812k.

Although they are not performing too badly, I cannot see any more potential for them compared to houses and considering the rule that land appreciates in value while building depreciated in value, I am thinking of selling them and jump into the house market in Sydney before it gets too late.

Any comments will be appreciated

 

[Propertunity]

Although they are not performing too badly, I cannot see any more potential for them compared to houses

Why not?

and considering the rule that land appreciates in value while building depreciated in value, I am thinking of selling them and jump into the house market in Sydney before it gets too late.

I think that would be a mistake. There are high transaction costs to sell and repurchase let alone having to pay CGT. The houses that you want to buy would have to recover all that lost cash plus outperform the units you have now - that is a big ask. If I were you (and I'm not), I'd reconsider.

 

[HandyAndy888]

Seems to me you are itching to capitalise a bit. We all get it some time, but I think hanging onto these would be the best idea for the present. The markets have not finished yet, perhaps more CG is on it's way in the short term.

 

[Player]

Suck out as much equity as you can muster and your lenders will allow and park it in an offset (if as you state they have had a good increase in value).

Perhaps use that for a deposit on a house (with decent subdivible land component). This of course assumes you have the servicibility to take on another purchase.

Or, perhaps sacrifice one of your apartment IP's and have a mix of apartments and using the proceeds to get into a house with land component.

Be wary however, as has been stated, your transaction costs will erode any profit and then there's CGT also.

Don't rush. Work out "what if" scenarios on paper and let the numbers do the talking.

 

[The Y-man]

I have been new here but after browsing through the posts for a few times I have learnt a lot which I did not even think of before. At the moment I hold several IPs which are all apartments in Sydney and I bought them all through Off-the-plan. I know off-the-plan is always the last option down the list but I bought them with a rush just in order to get the first home owner staff done.

You've gotten through one of the riskiest parts of OTP purchases - the valuation - and you've come through with flying colors. Sit back and enjoy a bit.

Assuming your apartments are in places where land is at a premium, you should continue to see a rise in value.

Cheers,

The Y-man

 

[Helenr]

thanks for the comments everyone. Probably I have to be patient a little bit to wait for the CG.

The reason I want to sell is all the apartments I am holding at the moment are high rise with lifts and swimming pool etc. I know strata levies will passibly bite me at some stage. Obviously I don't want to wait until that happens.

 

[Helenr]

Suck out as much equity as you can muster and your lenders will allow and park it in an offset (if as you state they have had a good increase in value).

Good point. Actually I am thinking of restructuring my loan as well. Get as many equity out the bank as possible is my aim

I have been told banks are always conservative especially with regards to revaluation of the units. Dunno whether I can convince them the numbers I listed above, keep my finger crossed.