How do I work out if I should I keep my old home as an investment property or sell & buy a new home?
The really great thing about numbers is they can take this complex, emotional decision – and turn it into facts, and literally figures. The outcome may make a really obvious choice apparent.
Lets look at simple steps towards this decision
1. Seek expert advice – first port of call, mortgage broker. What if a conversation with a broker can eliminate an option because maybe it just isn’t possible for you? Would that help simplify the decision? Your broker will also arm you with questions to ask your…
2. Accountant. There might be tax implications at play which also help define your decision – for example, capital gains tax implications, but actually more immediately the most common misconception we see is the misunderstanding that you can simply take money out of the home you’ve almost paid off – and its tax deductible. In fact, if you have already paid most of your home off you could end up with an immediate tax problem on the rent from your old home. Of course, this is not advice right here – the advice here is to check with your accountant.
3. Broker in action again – break down the numbers into a weekly, fortnightly or monthly cost, and compare option A with option B, how do those numbers sound? Does it feel affordable? This might eliminate an option or give you confidence to proceed.
4. Finally, goals – how does keeping the property align with your longer term goals, what will it do for you? Are you holding onto if for emotional reasons at the cost of other goals?
As a broker I revel in these kinds of questions, it’s so simple for me to compare lenders and policies and compile the numbers you need to make this an easy decision for you.
Want to know more? Check out the video below, and, when you're ready contact a Two Red Shoes broker.
