At the end of the day, life is short and we need to make the most of it. We can't take money with us when we pass. We just need enough to survive and leave a legacy of some description to our kids. Happiness trumps everything, if you're happy, kudos to you š
Appreciate that, Thankyou. We were worried about the legacy for the kids but itās not like we sold everything and gave it away. There will be plenty left over in 50 years when we kick itā¦ hopefully
Having investment properties is just a means to an end, and hence one of best ways to get to your desired home is cashing in and trading up.
Your new PPOR should have plenty of equity which can be used as a basis for future investments.
So I don't think it is a choice of between one or the other but both, achieving happiness and also a revised financial strategy.
Strategy for life should be happiness added up over time, so you take some pain now for future extra happiness. Money is purely a means to an end, unless of course simply having lots of money makes you happy.
Ideally you discount future happiness a bit to allow for the uncertainty.
Sure have- pretty much every 5th year Iāve had a year off since I was 17. Mainly overseas, minimal to no work, family, friends, experiences. Seen far too much death to build someone elseās dreams or work in the rat race for 40 years just to look at numbers on a screen and leave it all behind when I cark it.
I know how to work hard and smart, it hasnāt really damaged any career I wantedā¦ if anything itās helped me have the courage and to see what I want and to change jobs and towns. You can move around, leave the nest etcā¦ you arenāt a tree.
I meant $200 a week on what my normal PPOR mortgage was. Yes Iāll be losing out on rental income but not as much as you think when you take the true cost of ownership away. Rates, insurances, management fees, water etc..
Great work OP!
We did something similar. Sold an IP and a PPOR in Sydney. Upgraded to a nice house in the North Shore.
Overall mortgage is manageable. IPs should be used for a reason. Not to hold forever and die with the highest bank balance.
Cool! I think this could be another reason to answer questions from people who ask āwho are all these people buying the $4m-5m north shore houses?ā
Itās generally mum and dads, but theyāre mostly using equity to obtain it and not borrowing 80%.
Love this ... once you have young kids you do realise that happiness and comfort are so critical when your world is hectic.
Having a place you love with the people that matter most every day makes for a great existence.
We are tossing up the same thing .. 2nd child in the way, looking at selling an IP for renos that will make our house perfect for us for the next 20 years.
Its hard to let go of an investment when the world tells you to make money and maximise capital growth, but perspectives change and I think you'll be richer / wealthier for it
š
Thanks!
Canāt agree more with the kids. We are looking to have our third and already have 2 boys. That doesnāt work well on a 500sqm block. The new one is 4000 Sqm.
It is hard, but the world doesnāt know the ins and outs of your personal life so Iād say go for it
$95,000 is what the account thinks based off what the agents think the selling price will be. 1 is up for sale now and we are waiting for new FY for the other. PPOR we will put up mid June.
Stressful selling 1 house, 3 is horseshit.
Good timing. I'm trying to work out how to turn 2 ips in suburban adelaide into a retirement beach house on yorke peninsula.... the beach house won't have anywhere near the cap growth of the ips... but beach house!
Very much in the same position. Lots of life & health issues, now looking at going down to 1 day/week or just taking a year or two off to focus on happiness.
Iāve done the same with building our forever home which will be paid off by the time itās finished and we move in. Then weāll have the option to invest all future cashflow into ETFs and even redraw from the home equity if we want with a tax deductible loan.
This is great!! It's exactly what those properties were for.... to get your dream!
That dream is different for everyone, and looks different at different times of our lives. The goal isn't always as many properties as you can get, it can be putting the pieces together to get your dream property (whatever that is).
Thankyou. And you are right. This wasnāt our dream house 5 years ago before kids. We wanted to be on a small block close to the city.
Funny how much kids change all aspects of your life
My parents had an IP, they turned their first home into an IP after buying a bigger family home. I'm not sure what their net assets or overall mortgages where by then.
Anyway my dad rented to a neighbours friends, and we all know how that was going to end. There was a huge fight maybe 3-4 years later. Parents ended up selling the IP house because the tenants were causing them grief and it destroyed a couple of friendships and there were arguments with the REA and the REA refusing to talk my tantrum throwing 6'2 dad etc.
They took an inheritance and the equity of the two houses and bought one big house.-Mcmansion.
Crossing lines between friends and money is always difficult. Rarely works out.
I do have 1 more IP that my parents live in. Theyāve lived there for 6 years now and as soon as settlement occurred itās the last time we have spoken about who owns the house. My parents sent me to private school and were always so supportive of everything I did. Even if they stopped paying rent I wouldnāt care and thatās how it needs to be. Itās their house. I just own it.
Well imo their current house is unnecessarily large as in I would never buy it because waaay too much maintenance.Ā
Ā But they were/are relatively financially illiterate, had they held the IP and not let emotions and that drama get in the way it would have worked out a little better financially, they'd have about $1.9 mil in housing assets and a positive geared property vs say $1.3 mil in housing assets once it was all paid off. And obviously negative gearing and the taxes benifits was way out of their scope and understanding.
Ā Ā Neither of them finished high school and basically understood: ppor housing = a safe place to park your money and the best place to invest ALL their spare money including fixing it up. They love their oversized mcmansion so I think it was the right choice for them, but one is OCD and likes gardening and the other is the best handy man you'll ever meet.
Bought a brand new car a few years ago, when something used would have also been suitable.
But got exactly what I wanted.
No regrets.
However, doing things like this is different when you have been working hard for a while and have already ticked off a few life goals. You can take your foot off the accelerator a little from time to time and know that overall the ship has momentum and is already pointed in the right direction.
I had a full time job 25 years ago, when we had a snow day (it was in a cold country) that felt like Christmas Day. I thought that was no way to live and never worked full time again. 20 hrs max. No regrets.
That's a terrible idea, most people drop a day at work when they have a ton of passive income, not sell their income producing assets to increase their ppor mortgage payments.
I donāt need to keep up with the joneses, we did it because we want to come home to something both of us never dreamed we would ever have.
Time is more valuable I agree. So the time we have will be spent being thoroughly enjoyed because we made a lot of money by selling. Have to sell at some point.
In 2023, I bought a Toyota Atmos hybrid (top of the range) via a payment plan to cut my company's taxes. I never thought I would buy such an expensive vehicle. It was the best thing i have ever bought, it changed my driving life 95%. If I could sleep in it, I would, lol
At the end of the day, life is short and we need to make the most of it. We can't take money with us when we pass. We just need enough to survive and leave a legacy of some description to our kids. Happiness trumps everything, if you're happy, kudos to you š
Appreciate that, Thankyou. We were worried about the legacy for the kids but itās not like we sold everything and gave it away. There will be plenty left over in 50 years when we kick itā¦ hopefully
Yep dropped a high paying fifo gig to work back in town so i can be home every night for my young daughter.
Legend mate. Good for you.
Having investment properties is just a means to an end, and hence one of best ways to get to your desired home is cashing in and trading up. Your new PPOR should have plenty of equity which can be used as a basis for future investments. So I don't think it is a choice of between one or the other but both, achieving happiness and also a revised financial strategy.
Strategy for life should be happiness added up over time, so you take some pain now for future extra happiness. Money is purely a means to an end, unless of course simply having lots of money makes you happy. Ideally you discount future happiness a bit to allow for the uncertainty.
Sure have- pretty much every 5th year Iāve had a year off since I was 17. Mainly overseas, minimal to no work, family, friends, experiences. Seen far too much death to build someone elseās dreams or work in the rat race for 40 years just to look at numbers on a screen and leave it all behind when I cark it. I know how to work hard and smart, it hasnāt really damaged any career I wantedā¦ if anything itās helped me have the courage and to see what I want and to change jobs and towns. You can move around, leave the nest etcā¦ you arenāt a tree.
How does turning 3 properties into 1 only cost 200/week extra when you lose out on renting out 2 of the properties?
I meant $200 a week on what my normal PPOR mortgage was. Yes Iāll be losing out on rental income but not as much as you think when you take the true cost of ownership away. Rates, insurances, management fees, water etc..
My next dream home is next to a lake, but not many of them around SE Melbourne unfortunately
Good luck buying near Albert park. Keep going south and east until you get to Lakes Entrance, Iāll have beer with you anywhere on the lake system.
Hey thereās Patterson Lakes in between, Kath and Kimās place is up for sale I hear
Yes thatās my dream Patterson Lakes
Why is luck needed to buy near Albert park? Is it because itās very tightly held?
Great work OP! We did something similar. Sold an IP and a PPOR in Sydney. Upgraded to a nice house in the North Shore. Overall mortgage is manageable. IPs should be used for a reason. Not to hold forever and die with the highest bank balance.
Great way of looking at it. Any regrets on your part?
Not regrets at all. We are raising our young family in a house in a quiet leafy area, near good schools.
Cool! I think this could be another reason to answer questions from people who ask āwho are all these people buying the $4m-5m north shore houses?ā Itās generally mum and dads, but theyāre mostly using equity to obtain it and not borrowing 80%.
Love this ... once you have young kids you do realise that happiness and comfort are so critical when your world is hectic. Having a place you love with the people that matter most every day makes for a great existence. We are tossing up the same thing .. 2nd child in the way, looking at selling an IP for renos that will make our house perfect for us for the next 20 years. Its hard to let go of an investment when the world tells you to make money and maximise capital growth, but perspectives change and I think you'll be richer / wealthier for it š
Thanks! Canāt agree more with the kids. We are looking to have our third and already have 2 boys. That doesnāt work well on a 500sqm block. The new one is 4000 Sqm. It is hard, but the world doesnāt know the ins and outs of your personal life so Iād say go for it
Absolutely. Did the same recently
What was your situation if I can ask? Why?
Or switch gear as a ppor āhopperā which is great as ppor is not subject to cgt, works out great when its tine to downsize down the track
Congratulations, how long have you held the investment properties and are they houses/apartments?
3 houses. PPOR owned for 4 years. 1 investment owned for 9 and the other for 2. Walking away with just over 1.2m in cash
Any taxes to pay?
$95,000 is what the account thinks based off what the agents think the selling price will be. 1 is up for sale now and we are waiting for new FY for the other. PPOR we will put up mid June. Stressful selling 1 house, 3 is horseshit.
Ouchiesā¦ best of luck, OP! May you get the prices youāre seeking!
Good timing. I'm trying to work out how to turn 2 ips in suburban adelaide into a retirement beach house on yorke peninsula.... the beach house won't have anywhere near the cap growth of the ips... but beach house!
Very much in the same position. Lots of life & health issues, now looking at going down to 1 day/week or just taking a year or two off to focus on happiness.
Iāve done the same with building our forever home which will be paid off by the time itās finished and we move in. Then weāll have the option to invest all future cashflow into ETFs and even redraw from the home equity if we want with a tax deductible loan.
This is great!! It's exactly what those properties were for.... to get your dream! That dream is different for everyone, and looks different at different times of our lives. The goal isn't always as many properties as you can get, it can be putting the pieces together to get your dream property (whatever that is).
Thankyou. And you are right. This wasnāt our dream house 5 years ago before kids. We wanted to be on a small block close to the city. Funny how much kids change all aspects of your life
My parents had an IP, they turned their first home into an IP after buying a bigger family home. I'm not sure what their net assets or overall mortgages where by then. Anyway my dad rented to a neighbours friends, and we all know how that was going to end. There was a huge fight maybe 3-4 years later. Parents ended up selling the IP house because the tenants were causing them grief and it destroyed a couple of friendships and there were arguments with the REA and the REA refusing to talk my tantrum throwing 6'2 dad etc. They took an inheritance and the equity of the two houses and bought one big house.-Mcmansion.
Crossing lines between friends and money is always difficult. Rarely works out. I do have 1 more IP that my parents live in. Theyāve lived there for 6 years now and as soon as settlement occurred itās the last time we have spoken about who owns the house. My parents sent me to private school and were always so supportive of everything I did. Even if they stopped paying rent I wouldnāt care and thatās how it needs to be. Itās their house. I just own it.
Well imo their current house is unnecessarily large as in I would never buy it because waaay too much maintenance.Ā Ā But they were/are relatively financially illiterate, had they held the IP and not let emotions and that drama get in the way it would have worked out a little better financially, they'd have about $1.9 mil in housing assets and a positive geared property vs say $1.3 mil in housing assets once it was all paid off. And obviously negative gearing and the taxes benifits was way out of their scope and understanding. Ā Ā Neither of them finished high school and basically understood: ppor housing = a safe place to park your money and the best place to invest ALL their spare money including fixing it up. They love their oversized mcmansion so I think it was the right choice for them, but one is OCD and likes gardening and the other is the best handy man you'll ever meet.
Bought a brand new car a few years ago, when something used would have also been suitable. But got exactly what I wanted. No regrets. However, doing things like this is different when you have been working hard for a while and have already ticked off a few life goals. You can take your foot off the accelerator a little from time to time and know that overall the ship has momentum and is already pointed in the right direction.
What did u get
2006 Camry
Gold, base model, tissue box on the back shelf
I decided to splash out and went with the straw hat on the parcel shelf option.
Ooooh that's a funny one. Classic ausfinance humour, executed to perfection.
I had a full time job 25 years ago, when we had a snow day (it was in a cold country) that felt like Christmas Day. I thought that was no way to live and never worked full time again. 20 hrs max. No regrets.
That's a terrible idea, most people drop a day at work when they have a ton of passive income, not sell their income producing assets to increase their ppor mortgage payments.
Dropping a day wonāt make me happy. Driving to a house that Iām insanely proud of does.
Time is more valuable than keeping up with the Joneses, you will realise that at some point. Good luck to you.
I donāt need to keep up with the joneses, we did it because we want to come home to something both of us never dreamed we would ever have. Time is more valuable I agree. So the time we have will be spent being thoroughly enjoyed because we made a lot of money by selling. Have to sell at some point.
In 2023, I bought a Toyota Atmos hybrid (top of the range) via a payment plan to cut my company's taxes. I never thought I would buy such an expensive vehicle. It was the best thing i have ever bought, it changed my driving life 95%. If I could sleep in it, I would, lol