PPOR purchased 2008 for $255 k (loan $177 K) - Valued at approx $320 - $350 k in 2014
IP purchased 2009 for $210 k (loan $199 K) - Would get approx $230 - $240 k if sold today
IP is a 41 sqm 1 bed in Dianella
Also still negatively geared even after holding for 4 years.
Properties are (approx) conservatively worth $230 k + $ 320 K = $550 K
I havent had them valued.
Currently my LVR is 376/550 = 68 % LVR
If I sold my IP my LVR would be 177/320 = 55% LVR
I always thought over the past couple of years that seeing as it wont take long for it to become neutral I may as well hang on to it and over the years it would become positve cash flow and cg will happen but now I'm looking at the opportunity cost.
I could sell off this dead dog and put my cash into something that will perform better. I'd buy in a rising market and something like a villa this time in the outer suburbs but not too far out so it wont be too ng. Something MTR said to me the other day really struck a chord with me.
Would you cut your losses and sell even though you might be lucky to only make $20 k from the ip or even just break even.
Or shall I keep my LVR at 68 % and buy another ip this year, then wait for a couple of years until Perth hits the top of the cycle and then sell this underperforming asset then. I have no idea how much CG i'll get if i sell it in 2 years.
I think my gut is telling me to get rid of it and pull the cash out to buy something with more potential. If i buy right this year I might even be able to invest again next year as I'll have equity from the new ip which im hoping will have risen in value and my lvr would start out at 55%
If I did sell it, it has put me back a few years but I think its all been a good learning experience for me in not to buy at the top of the cycle and to buy a better property, something owner occupiers will want to live in as well as tenants. Also not just to look at the yield.
Also I have come out of this really well. i'll have saved $50 k in another 1 and a half years staying here at my parents. Also they gave me a large deposit for my ppor because at the time I could only afford a loan of $177 k and the property was worth $255, so that meant I had instant equity. Financially i'm in a good position. I'm still only young at 40 and will be investing for a good 20 years.
Hoping for some guidance.
thanks
IP purchased 2009 for $210 k (loan $199 K) - Would get approx $230 - $240 k if sold today
IP is a 41 sqm 1 bed in Dianella
Also still negatively geared even after holding for 4 years.
Properties are (approx) conservatively worth $230 k + $ 320 K = $550 K
I havent had them valued.
Currently my LVR is 376/550 = 68 % LVR
If I sold my IP my LVR would be 177/320 = 55% LVR
I always thought over the past couple of years that seeing as it wont take long for it to become neutral I may as well hang on to it and over the years it would become positve cash flow and cg will happen but now I'm looking at the opportunity cost.
I could sell off this dead dog and put my cash into something that will perform better. I'd buy in a rising market and something like a villa this time in the outer suburbs but not too far out so it wont be too ng. Something MTR said to me the other day really struck a chord with me.
Would you cut your losses and sell even though you might be lucky to only make $20 k from the ip or even just break even.
Or shall I keep my LVR at 68 % and buy another ip this year, then wait for a couple of years until Perth hits the top of the cycle and then sell this underperforming asset then. I have no idea how much CG i'll get if i sell it in 2 years.
I think my gut is telling me to get rid of it and pull the cash out to buy something with more potential. If i buy right this year I might even be able to invest again next year as I'll have equity from the new ip which im hoping will have risen in value and my lvr would start out at 55%
If I did sell it, it has put me back a few years but I think its all been a good learning experience for me in not to buy at the top of the cycle and to buy a better property, something owner occupiers will want to live in as well as tenants. Also not just to look at the yield.
Also I have come out of this really well. i'll have saved $50 k in another 1 and a half years staying here at my parents. Also they gave me a large deposit for my ppor because at the time I could only afford a loan of $177 k and the property was worth $255, so that meant I had instant equity. Financially i'm in a good position. I'm still only young at 40 and will be investing for a good 20 years.
Hoping for some guidance.
thanks