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Sell my house and invest it and travel or keep it?
07-22-2017, 03:19 AM
Looking for some advice here!
I'm struggling to decide what to do in regards to keeping my house in Aus and renting it out (won't cost me anything to keep but i won't be able to pay off the principal, i'd only be paying the interest)
or
Selling it and using the money to invest and double the interest i can get each year to help pay for travel over the next 3-5 years? Would most likely turn my $8kAUD+ a year return on investment to approx $16kAUD a year.
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Sell my house and invest it and travel or keep it?
07-22-2017, 03:26 AM
Travel. And you better hurry up. The last plane out of Sydney's almost gone.
Dreams are like horses; they run wild on the earth. Catch one and ride it. Throw a leg over and ride it for all its worth.
Psalm 25:7
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Sell my house and invest it and travel or keep it?
07-22-2017, 03:47 AM
It depends on many factors. The main ones are:
1) Do you see yourself wanting to live in that house 10-20 years from now?
2) Real estate prices at that location. Are they projected to rise or fall?
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Sell my house and invest it and travel or keep it?
07-22-2017, 04:10 AM
What would you be investing the money from the sale of your house in?
Game/red pill article links
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Sell my house and invest it and travel or keep it?
07-22-2017, 04:59 AM
Ok so....
Your 1st solution is to rent out the house under the assumption it won't cost you anything. Wrong. Now I'm not familiar with the law, but do they have property tax? Do they tax money you make as a land lord? Will you be responsible for the a broken water heater or other major appliance? I doubt that renting out the house will cost you net zero... But what do you gain other than retaining the property?
2. You sell the house and make off with the equity if any that you have in it. Now you made money and don't have to worry about it.
Assets make you money, liabilities cost you money.
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Sell my house and invest it and travel or keep it?
07-22-2017, 05:19 AM
Keep the house. Selling it means you will have to pay real estate agents commission plus conveyancing and advertising costs. I am assuming its an owner occupied property otherwise you would pay capital gains tax also if its an investment. Then in the future if you decide to buy a house again you have to pay stamp duty and conveyancing fees.
Also I think the Australian property boom will continue for a long time.
I agree with what Bacon said that loans to property developers are often high risk, far higher risk than the property developers would have you believe. The risk of capital loss in these products is meaningful. I would suggest if you do decide to sell your property dividend paying stocks or an index fund/ETF would be the way to go to generate income.
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Sell my house and invest it and travel or keep it?
07-22-2017, 06:31 AM
My person opinion is sell if it is in a low growth area especially if your property is not unique in some way. I sold my property in a major Aus city 3 months ago (only got half but that's another story).
I got a real good price BUT the market was getting tougher week by week it was obvious to see. I had something quite special. Don't believe the real estate bull dust you hear in the media.
And for goodness sake don't touch'e the concrete box cookie clutter apartments that are not special. They are absolutely rubbish built and despite what you hear in the media are coming into oversupply. Many will cost's tens of thousands to fix. I am in this industry so know first hand.
Many people make the mistake of thinking a large amount of money going into an investment type shows the underlying fundamental's are strong, or they can ignore the warning signs. Now is the time to be very selective in what you purchase in shares or property.
Anyway I could buy another property tomorrow but I'm cashed up even though interest rates are crap. I'm normally a very positive investor but here in Aus there are just too many signs all isn't well. Good to see you developer mate is doing well. A lot of the guys that have been at it for a long time and successful have cashed up or are in the process of getting out and sitting on the sidelines. I'm not talking about the likes of Mirvac they are sound and do pretty ok stuff.
There are going to be some discounted development sites for sale soon.
So I'm saying at least if you cash up its a long way into a boom and I just don't see the further possible gains been worth the risk.
Things will change for the better, its just a point in the cycle we are in.
Another thing to consider is the peace of mind that comes to having cash in the bank and no debt in times like this.
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Sell my house and invest it and travel or keep it?
07-22-2017, 10:30 AM
Putting numbers aside, sometimes it is good to just sell it and have one less things to worry about. Especially, if you are going to be far away. And it sounds like you have thin margins if I read that right. 30 to 40 dollars a week?
Look up that 110k investment thread started by Vinny. I posted more about my thoughts on investing.
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Sell my house and invest it and travel or keep it?
07-22-2017, 10:40 AM
When it comes to renting, a lot of people usually assume net profit is guaranteed, but that doesn't always have to be the case. The potential stress, as well as the loss of time&money that can result from being forced to deal with an irresponsible tenant can easily outweigh the monthly profits you gain from your rent.
OP, you mentioned this is your third rental property; then you should compare the potential profit from this one with the profits you gain from the other two. If renting this house would result in only a marginal addition to your overall income, then that's a good argument for selling the house instead of renting it. Selling real estate is a big deal and no one can make the decision for you, but in this case the fact that you have more property elsewhere makes it easier.
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Sell my house and invest it and travel or keep it?
07-22-2017, 12:37 PM
Maybe you could just work in each area you want to live and do a more long term living type of travel. Given the somewhat limited income that would probably make sense. (With that said in terms of pure passive investment income you are far ahead of most!)
Perhaps try getting some sort of online business going because you already have a passive income level that is livable just not exactly a ton of fun to live on. If you can get to the point where you get a business spitting out another 1,500 a month you'd be laughing.
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Sell my house and invest it and travel or keep it?
07-22-2017, 09:51 PM
Thanks for the responses guys. I'll try to address any questions
Matt Warner sounds like you know the Aus market well, in regards to my particular property it's size and location mean it will never boom. Has the potential to improve but not by a lot. I agree selling it takes away all the stress, i've had one bad renter in my time and man was it a pain in the ass. I didn't exactly lose any money out of it but it was very stressful.
Samsamsam and Khan yea i'd only be getting an extra $20-30 a week extra once all the cost are taken into account for if i rent it out, my other property was very different to this one in size and potential growth which worked very well for me. I've looked at that thread, i'll have another look, i'm alway looking to diversify and have a little bit of money in different places, it's good to see other peoples ideas and see where people have made there money.
lavidaloca that's exactly what i would like to do, unfortunately as you said i don't have quite enough to live the lifestyle i'd like while traveling and i'm probably stressing out a little making sure once i do make the move i'm not in a position worse then i was living back in Aus. Currently working towards getting an online business up and running and the plan would be just as you describe above.
Feels like a big decision, probably the biggest of my life, not just to sell the property but to move away longterm and travel, that's why i'm trying to get as much info and knowledge as possible before making hopefully the right move.
Thanks again for all the responses
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Sell my house and invest it and travel or keep it?
03-08-2018, 01:53 AM
Just to share some experience, I'd say keep and travel, for sure.
If you're based in the West, the rental income will cover your living in most travel locations (or at least your accommodation), a huge lump sum of cash is tempting to eat into, and inflation will depreciate it faster than you think.
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Sell my house and invest it and travel or keep it?
03-08-2018, 07:02 AM
OP mentions rent will only cover the interest and he won't be able to pay off the principal.
That's a strong indication real estate is overpriced.
Especially with current low interest rates.