Hi all,
I am currently reviewing my portfolio and am considering a partial sell down. I don’t have many fellow investors to talk to, so though I might open it up to the forum for some input/advice.
I am from the school of NEVER SELL….. but gee it seems tempting to help me remove non-deductible debt quickly!
My situation is I have 7 Investment properties, and then my PPOR (8 in total):
My PPOR has $437K owing on it, Value $570K
My Investments have $1.36 Mill owing on them, Value $1.8Mill.
Overall my LVR is 76%.
I’ve run some numbers and have worked out that if I sell 4 of my Investments, after tax and fees I would be able to greatly reduce my non-deductible debt. The 5 properties would then look like:
My PPOR would have $100K owing on it, Value $570K
My 4 remaining Investments would have $650K owing on them, Value $720K
Overall my new LVR would be 58%
From there my increased cashflow on my PPOR would enable me to pay down the PPOR inside 3 years, but also allow me access up to 95% of the portfolio value, or $470K for further investment (not including 95% on an additional property – so net capability perhaps closer to $1 Mill or so depending on what the bank allows me to do) to be able to go and buy more property and get back up to the original investment value of $1.8 Mill.
Now I do forgo capital gains on the 4 properties to be sold, but this seems to be offset by immediately going and purchasing another $1 Mill of property. IE: Exiting the market and re-entering after some debt shuffling immediately in the same cycle. I am thinking I am selling average priced houses collectively (the 4 to be sold) and hopeful of finding a ‘deal’ in the $1 Mill bracket.
I would welcome some advice from people who might have done this or from the industry that might be able to identify any gotchas!
Thanks heaps!
JD.
I am currently reviewing my portfolio and am considering a partial sell down. I don’t have many fellow investors to talk to, so though I might open it up to the forum for some input/advice.
I am from the school of NEVER SELL….. but gee it seems tempting to help me remove non-deductible debt quickly!
My situation is I have 7 Investment properties, and then my PPOR (8 in total):
My PPOR has $437K owing on it, Value $570K
My Investments have $1.36 Mill owing on them, Value $1.8Mill.
Overall my LVR is 76%.
I’ve run some numbers and have worked out that if I sell 4 of my Investments, after tax and fees I would be able to greatly reduce my non-deductible debt. The 5 properties would then look like:
My PPOR would have $100K owing on it, Value $570K
My 4 remaining Investments would have $650K owing on them, Value $720K
Overall my new LVR would be 58%
From there my increased cashflow on my PPOR would enable me to pay down the PPOR inside 3 years, but also allow me access up to 95% of the portfolio value, or $470K for further investment (not including 95% on an additional property – so net capability perhaps closer to $1 Mill or so depending on what the bank allows me to do) to be able to go and buy more property and get back up to the original investment value of $1.8 Mill.
Now I do forgo capital gains on the 4 properties to be sold, but this seems to be offset by immediately going and purchasing another $1 Mill of property. IE: Exiting the market and re-entering after some debt shuffling immediately in the same cycle. I am thinking I am selling average priced houses collectively (the 4 to be sold) and hopeful of finding a ‘deal’ in the $1 Mill bracket.
I would welcome some advice from people who might have done this or from the industry that might be able to identify any gotchas!
Thanks heaps!
JD.