Sell or Not to Sell a House in Glendenning?

everypenny on 09/05/2017 - 11:29
Last edited 09/05/2017 - 11:50 by 1 other user

Hello All,

I am really confused on a decision to take and would like some help from the community.

• I own a property in Glendenning which I bought 2 years back for $530K.

• The property is now worth at least $720K, so have gained some equity out of it in 2 years.

Details about the property:

• 4 bedroom, 1 bath, 2 toilets, 500 sqm land but not regular rectangular shape
• Close proximity to M7
• Has a daycare walking distance
• Has a private catholic walking distance
• Has lots of car spaces
• Has a large sun room/entertainment area

Now, I am in a dilemma whether or not to sell the house and buy a land as we are interested to build a brand new house

I would like some advice on what I should do, so I have created a poll on what the community would do.

We are a family earning $150K, but not yet comfortable to buy an investment property yet without mortgage insurance.

Poll Options

• 18
  Hold on to the house for a few years. It is bringing in money
• 2
  Right time now to sell. Put it in the market
• 1
  Sell and rent for a few months and buy after 1 year when market settles
• 1
  Buy a land in Marsden Park not too far away and build your dream house and use the money gained
• 1
  Buy a land in Box Hill (hills) and build your dream house and use the money gained

• 

  k-rokfm on 09/05/2017 - 11:42

  Whats your current mortgage amount?

  • 

    everypenny on 09/05/2017 - 12:01

    Hi . Currently owing 515,000

    • 

      whooah1979 on 09/05/2017 - 14:59

      Currently owing 515,000

      Wow that is certainly every penny.

      Getting a second mortgage on $150k is risky.

  • 

    everypenny on 09/05/2017 - 12:08

    Hi Gerbil. Thanks for the reply.

    I currently owe 515K on the loan.

    We were also thinking of my little one who is 3.5 years old who needs to be at school in 1.5 years. Glendenning doesnt have the best of schools.

    That whole 'new house' feeling only lasts a few months - I guess we ll only realize once we go down that path. thanks for the advice.

• 

  Make it so on 09/05/2017 - 11:53

  It's not a huge amount of equity once you spread it out across two properties. It sounds like once you buy a second house, you would owe the bank well over $1M. Think about how much money you would be paying towards interest (even after negative gearing and rental), and you will probably realise that it is a stretch on your income (I am guessing that's two incomes - can you count on both of you to remain employed?). And if the market fluctuates in years to come, you could owe more than you own (as your equity is now thinly spread).

  Perhaps I am overly conservative, but is the stress and risk worth it? How confident are you about the pricing trend?

  • 

    everypenny on 09/05/2017 - 12:19

    Hi there. I wouldnt be able to afford two properties comfortably and we are being cautious on not doing that now. Maybe 2 years back it would have been worth it. Only option is to sell and buy.

    • 

      Make it so on 09/05/2017 - 14:46

      I would do calculations taking all fees and costs into account. You may find your usable equity is less than you thought, especially once you deduct costs of selling and buying another house (fees, tax, etc.).
      It sounds like a reasonable location to me. People underestimate the value of time, and being close to things you make use of frequently is important.
      Gerbil made a good point about the 'new house' feeling. Perhaps consider renovating your existing house if you are bored with it. We got our home rendered and repainted (roof tiles, fascia, gutters), and now it looks like a modern, brand new house. It has gone up in value by significantly more than we spent on renovating.

• 

  [Deactivated] on 09/05/2017 - 12:01

  -1

  at least $720K

  add maybe 50-80K ontop if you go the auction route

  • 

    everypenny on 09/05/2017 - 12:20

    Thanks.. Thats really tempting now :)

• 

  chumlee on 09/05/2017 - 15:46

  You sell in a hot market and you buy in a hot market so balances out but then you have selling costs such as agent costs, mortgage discharge fees etc plus stamp duty on new purchase.

  • 

    everypenny on 09/05/2017 - 17:00

    Thanks chumlee. Makes sense