YOUR PROPERTY FEASIBILITY

Hold vs. Sell
Financial Feasibility
 

You requested that we provide you with details around the prospect of holding your current investment property in Strathfield vs. selling. Below we provide you with the numbers that matter and our recommendation. It is important to note that you should speak with your accountant to verify the calculations against your personal tax position. 

The Sell
Numbers
 

There's a lot that goes into selling a home, below we top-line these costs and relate it to your personal financial situation.

* This calculation is an assumption only and you should consult with your accountant to get a complete understanding of your personal tax position.
The 5yr
Projection
 

To determine if it is best to hold a property vs. sell, we need to crunch the numbers above a little harder. We have provided a comparative analysis on both options over a 5 year period. For the purpose of this exercise and to provide a level of equilibrium, we have calculated the capital growth at a rate of 4.85%, compounded over 5 years. For the ‘Sell Strathfield and purchase one property”option, we deduct the selling fee’s associated with Strathfield and the cost difference of the purchasing fee for the new property vs. the $450,000 property. This provides a true net position on the sell criteria.

Pro's
Vs. Con's
 

Here we provide a short pro's and con's analysis for the option to hold Strathfield.

• $84K in selling costs. If your financial position allows you to hold the property, then this is a lot of money to sacrifice for no real immediate benefit
 
• A two bedroom apartment in Sydney is always going to perform well. Although the market is cooling, the long-term growth prospects of this property are strong - especially given apartments to the same spec in neighbouring suburbs closer to the city are recording average median prices in excess of 50K on Strathfield apartments. The ripple effect will only continue to promote growth
 
• Maintain a presence in a blue-chip global city for the long-term
 
• You will have two properties working for you and increasing your chances of extracting further equity to grow your portfolio
 
• Without taking into account any tax benefits, your investment is positively geared, so will act a strong support mechanism for the rest of your portfolio
 
• There might be an opportunity to renovate and create additional equity in this property. 
• Smaller budget to purchase your next property

• Missed opportunity to sell at the peak of the market
Our
Recommendation
 

Our recommendation is to hold the Strathfield property and purchase the second property at $450,000. 

* Milk Chocolate price data used on this website is sourced and relies upon information supplied by a number of external sources (including governmental authorities). This data is supplied on the basis that while Milk Chocolate believes all the information provided will be correct at the time of writing, it does not warrant its accuracy or completeness and to the full extent allowed by law excludes liability in contract, tort or otherwise, for any loss or damage sustained by you, or by any other person or body corporate arising from or in connection with the supply or use of the whole or any part of the information on this website through any cause whatsoever and limits any liability it may have to the amount paid to the external sources for the supply of such information.