To Let or For Sale

We bought a House! Okay, so you know that already. But we need finance, so off to the bank we email. We have a guy, he’s a lending specialist, and he’s ace. I called him last week to make sure he wasn’t going to be on holidays, because that would be totally inconsiderate.

Monday we email him. We’ve bought a house, now where’s the money? I also organise for a building and pest inspection. Our money man tells us he needs a valuation of our house in case we sell, and a rental appraisal in case we don’t. The former he’s already organised, and the latter we need to do. So I call Greg, the guy who sold us the house, and organise a visit.

So we’ve not heard back on the valuation yet, but the rental appraisal came in at $360-$370 a week. That’s more than 20% more than we thought, and we’re now wondering whether we should keep the place as an investment.

To sell a negatively geared house and buy a positive cashflow/geared one in its place would cost:

  • Selling commission: $15k
  • Stamp duty: $12k
  • Mortgage fees: $1k
  • Time to find a new property: $???

So at least $30k. If our house is negatively geared to the tune of $100 per week, that’s 300 weeks, or 25 years it would take to make a loss on keeping the place. Actually, let’s ignore that and just count the selling commission - 12.5 years. In 12.5 years the house will be worth over $1m. Not worth selling. So we’re planning on letting our house in Seaford come end of May. 10 minutes walk to the beach, 4 from Kananook train station and a 5 minute drive to the nearest shopping centre. If you’re interested, let me know!

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