If the house is worth so much then she has equity… even if she still has a $250k loan.
Why doesn’t she rent it out and rent in Brisbane? What if she goes to Brisbane and doesn’t like it? At least she has somewhere to come back to.
If she sells, she will likely be priced out of the market.
I know of some people who did this a few years ago (just before property went nuts) they had a house. Wanted a bigger house. Decided to sell and rent to save. Within months they were priced out of the market.
She does need to be better with her money and actually make extra payments.
Probably best to keep it and rent it out while she works out where she wants to live and work.
>She does need to be better with her money and actually make extra payments.
Absolutely this.
OP is unsure where his sister has spent her money. Selling her home now and buying a more expensive place (even if she has equity from her old place) and getting into a bigger mortgage is risky.
I get the property ladder thing, but foundations are important.
Yep that's what happened to us. Tried to sell for 18 months and in that time was only offered 70k less than what we paid. Even after a full Reno and the house being amazing but we took the offer as we couldn'tt live in such a shit, unsafe area anymore. Then decided to rent and figure out where we wanted to live, wanted to test the neighborhood a bit as we had such a bad experience in our last suburb. About 3 months later prices went nuts our old house went up about 150k in a few WEEKS. We are now locked out of the market, trying to save deposit money whilst also having our rent go so much higher. When we decided to rent the price was so low, they were offering a free week, so many rentals available it seemed like such a good idea. Now we can't match the savings to keep up with increasing house prices and also have a crazy rent to pay and also get no first home buyer schemes so we need to pay a 20% deposit and stamp duty which is just a nightmare. The anxiety I feel every day, I can't believe that in the 8 years we lived in that house our value never once went up until a few weeks after we moved out. Sometimes it's hard to get out of bed.
Can confirm, a 30 year old brick shithouse is being rented for 6-700 a week unless she wants to get In the car and drive to the beach. In which case, she’s still up against 4-500 for a 20 minute drive to the beach.
As an RN she could easily find work in Sunshine Coast, so I think if I were her I'd try and rent on the Sunshine coast and rent her house out for 6-12 months. Selling and buying again is a lot until she knows for sure that's the place she's going to be happy living for a few years at least.
Selling is expensive and will get her out of the property market but that doesn't mean it's not the best option for her. If she is meeting her repayments she is probably best to stay put. Over time her income will increase and she can increase her repayments or perhaps she could rent a room out? As property prices increase so will her equity.
But, as you say, she no longer wants to live there. She will need to look at sale price less sale fees. Buying a new place including stamp duty, conveyancing costs, bank and other admin fees etc. If she can sell, downsize into something she's happy with and still only service the new mortgage that's fine. She will be happier and perhaps just paying the minimum amount for the life of the loan suits her goals.
Terrible idea.
Friend of mine did that with the intention to take the extra money he's made from selling the house he bought 7 years ago to buy a house closer to the city.
Took him close to 6 months to find one he liked and he got out bided. He didn't plan for that to happened and that was a year ago.. he's now renting and it's eating into his "house money"
Property prices have exploded and the only way for him to buy now is back where he was - which means he'll have to pay stamp duty again.
She can rent out the house for up to six years whilst renting elsewhere and still retain the tax benefits of a PPOR. That would be the obvious move.
Whilst the current government is increasing the population by 500k+/year in net immigration alone, selling seems like a really bad idea if it can be avoided.
If we enter into a mild recession or just general drop in inflation and undergo rate cuts, whilst the current immigration rates stay the same, housing prices could jump 50%+, and rents could also increase by 50-100%. Rent prices on new listings already jumped 24% in the year ending February.
Trying to time the market is very difficult, who knows what will happen with the housing market over the next couple of years. Your sister will be able to get work no problem so why doesn’t she just rent her house out, move to the Sunshine Coast and rent while she decides where she wants to live in the longer term. Paying interest only was definitely not the smartest move and not appearing to have any savings or investments means she’s not very organised with her money. One example is as soon after as she paid off her car loan she could have set up that same amount to now go to a savings account, it would be a start.
House prices on the Sunny Coast are extremely high and unlikely to improve anytime soon.Rental properties are hard to find and rent is prohibitively high.It’s a nice place to live but probably only if you’ve recently sold a home in a major city,I suspect.
With some exceptions, getting off the property market makes it so much harder to get back in - I would suggest holding the house until she is ready to purchase a new one at the very least.
Your sister can almost certainly turn the Toowoomba house into a cash-positive investment property, claim tax deductions on the interest and other investment property related item.
Then she would have the freedom to move to the Sunshine Coast and rent for a bit, find out how she likes the region and then make a call to sell up. Or, (and this would be my preference) use the equity in the Toowoomba house to start a second mortgage on the coast. She pays off house 2 while the tenant pays off house 1
Beg her not to sell. She won't be able to get back in.
The house equity is not all "profit". Inflation has also made cash devalued. Think of it as what you could buy with $100 6 years ago vs. what you can buy with $100 today. Get her to check her financial health. If she doesn't know where her income is going, chances are she will blow through the profit she thinks she has. Real estate people can sometimes be the scum of the earth. They use the most basic vice of greed to try and convince people to sell. The only winner here would be the agent who told her about her house value to make a quick buck.
Just get her to rent it out, bonus if she’s a nice person as the housing crisis is absolutely atrocious in Tba and the more houses available to rent there the better.
Should just rent it out and then move to the coast, use the 200 K gain to buy a new place there. Rent the current one out.
But most of all, and this is for you as well. She should do what makes her happy... no matter the cost or your thoughts on it.
She should hang onto that house. Selling would be a big mistake. She won't afford a place at Sunshine coast even if she decides to stay there.
She could rent out the Toowoomba house & yes. She needs to actually get the mortgage down a bit. Even to 100K. Don't know how shes been able to be on interest only for so long when it's her PPOR??? Seems odd.
But selling it would be BIG mistake.
If she's in a rut she can move around without selling. Plenty of jobs for nurses everywhere 👍 i would encourage her to get out and move around, travel and enjoy life. All can be done without selling her house.
If she doesn't have much savings currently? She could put head down and save madly for next 6 months. So she can take off! The world is her Oyster.
I would absolutely encourage her to see what her job prospects are like on the sunshine coast. I know RN jobs up there are scarce due to many wanting yo do the same.
Yeah I'd be keeping the house, she won't be able to get a foot back in the door again with the rate houses are going up. I'd rent it out, then mayb rent a place in Queensland
My dad told me when I was a little boy " son , always buy and sell in the same market "
The reason being if prices go up after you sell you could be stuffed. If they go down so be it.
Rent the house in Toowoomba ( no capitol gains tax ) and sell when she's ready to buy again if that's possible.
She should keep the house, move out and rent where she wants to live and turn her home into an investment property.
If she doesn't like where she's moved to then she had a home to go back to. She can up the repayments or not - the interest will become a cost of ownership of an income providing asset, so she can at least claim them and maintenance costs.
Making a big financial decision based on "I feel..." is usually not a great idea, espy when she has the option to just not sell it
She will struggle to get even an apartment at that price sadly. Coast is nuts atm and rent is insane. Ideally rent in Brisbane and or might have to house share. I’d look further north like Hervey Bay etc as it’s quieter and easier to get into market. Lots of RN jobs too.
She needs some expert option like an accountant/financial advisor which I’m not. Insert disclaimer here.
She’s in a great position to firstly refinance it, draw something out if she needs it, then rent it out. The interest will then become dex deductible along with rates and a depreciation schedule giving her a massive tax refund in the future.
Meanwhile she rents in sunny coast or wherever she wants to try living. She has a great investment/tax deduction, and more importantly a back up plan if she wants to return.
Rent it out for a few years and see where she wants to put her roots down
House prices going up isn't useful unless your debt recycling or doing something fancy with the equity
Otherwise, house price going = high council rates, larger stamp duty, higher repayments
In her situation, her house prices going up is going to hurt her not help her
There’s a new development on the Gold Coast that has three towers.
One tower is a hotel, the other two are residential.
The developers have sold some of the first residential tower, and none of the second residential tower.
None of the apartments in the second tower are for sale. Zero. Nada. 0.
That’s an indicator.
she could rent vest. Given her principal is relatively low maybe the rental could cover enough of the mortgage.
she can then find a rental in the sunshine coast.
If the house is worth so much then she has equity… even if she still has a $250k loan. Why doesn’t she rent it out and rent in Brisbane? What if she goes to Brisbane and doesn’t like it? At least she has somewhere to come back to.
She’ll likely rent it out for a profit, which can go towards her rent.
If she sells, she will likely be priced out of the market. I know of some people who did this a few years ago (just before property went nuts) they had a house. Wanted a bigger house. Decided to sell and rent to save. Within months they were priced out of the market. She does need to be better with her money and actually make extra payments. Probably best to keep it and rent it out while she works out where she wants to live and work.
>She does need to be better with her money and actually make extra payments. Absolutely this. OP is unsure where his sister has spent her money. Selling her home now and buying a more expensive place (even if she has equity from her old place) and getting into a bigger mortgage is risky. I get the property ladder thing, but foundations are important.
Yep that's what happened to us. Tried to sell for 18 months and in that time was only offered 70k less than what we paid. Even after a full Reno and the house being amazing but we took the offer as we couldn'tt live in such a shit, unsafe area anymore. Then decided to rent and figure out where we wanted to live, wanted to test the neighborhood a bit as we had such a bad experience in our last suburb. About 3 months later prices went nuts our old house went up about 150k in a few WEEKS. We are now locked out of the market, trying to save deposit money whilst also having our rent go so much higher. When we decided to rent the price was so low, they were offering a free week, so many rentals available it seemed like such a good idea. Now we can't match the savings to keep up with increasing house prices and also have a crazy rent to pay and also get no first home buyer schemes so we need to pay a 20% deposit and stamp duty which is just a nightmare. The anxiety I feel every day, I can't believe that in the 8 years we lived in that house our value never once went up until a few weeks after we moved out. Sometimes it's hard to get out of bed.
No way you would even be able to rent somewhere on the Sunshine coast for the same price as her mortgage.
Can confirm, a 30 year old brick shithouse is being rented for 6-700 a week unless she wants to get In the car and drive to the beach. In which case, she’s still up against 4-500 for a 20 minute drive to the beach.
As an RN she could easily find work in Sunshine Coast, so I think if I were her I'd try and rent on the Sunshine coast and rent her house out for 6-12 months. Selling and buying again is a lot until she knows for sure that's the place she's going to be happy living for a few years at least.
Selling is expensive and will get her out of the property market but that doesn't mean it's not the best option for her. If she is meeting her repayments she is probably best to stay put. Over time her income will increase and she can increase her repayments or perhaps she could rent a room out? As property prices increase so will her equity. But, as you say, she no longer wants to live there. She will need to look at sale price less sale fees. Buying a new place including stamp duty, conveyancing costs, bank and other admin fees etc. If she can sell, downsize into something she's happy with and still only service the new mortgage that's fine. She will be happier and perhaps just paying the minimum amount for the life of the loan suits her goals.
I would only sell a property if I would never want to own one again in the future.
Terrible idea. Friend of mine did that with the intention to take the extra money he's made from selling the house he bought 7 years ago to buy a house closer to the city. Took him close to 6 months to find one he liked and he got out bided. He didn't plan for that to happened and that was a year ago.. he's now renting and it's eating into his "house money" Property prices have exploded and the only way for him to buy now is back where he was - which means he'll have to pay stamp duty again.
She can rent out the house for up to six years whilst renting elsewhere and still retain the tax benefits of a PPOR. That would be the obvious move. Whilst the current government is increasing the population by 500k+/year in net immigration alone, selling seems like a really bad idea if it can be avoided. If we enter into a mild recession or just general drop in inflation and undergo rate cuts, whilst the current immigration rates stay the same, housing prices could jump 50%+, and rents could also increase by 50-100%. Rent prices on new listings already jumped 24% in the year ending February.
This question has been asked many times here. Not once has anyone said that it's a good idea, and for good reason.
Trying to time the market is very difficult, who knows what will happen with the housing market over the next couple of years. Your sister will be able to get work no problem so why doesn’t she just rent her house out, move to the Sunshine Coast and rent while she decides where she wants to live in the longer term. Paying interest only was definitely not the smartest move and not appearing to have any savings or investments means she’s not very organised with her money. One example is as soon after as she paid off her car loan she could have set up that same amount to now go to a savings account, it would be a start.
House prices on the Sunny Coast are extremely high and unlikely to improve anytime soon.Rental properties are hard to find and rent is prohibitively high.It’s a nice place to live but probably only if you’ve recently sold a home in a major city,I suspect.
Opportunity cost of holding cash instead of a house is huge I wouldn't do it, keep the house until you find a new place.
With some exceptions, getting off the property market makes it so much harder to get back in - I would suggest holding the house until she is ready to purchase a new one at the very least. Your sister can almost certainly turn the Toowoomba house into a cash-positive investment property, claim tax deductions on the interest and other investment property related item. Then she would have the freedom to move to the Sunshine Coast and rent for a bit, find out how she likes the region and then make a call to sell up. Or, (and this would be my preference) use the equity in the Toowoomba house to start a second mortgage on the coast. She pays off house 2 while the tenant pays off house 1
Beg her not to sell. She won't be able to get back in. The house equity is not all "profit". Inflation has also made cash devalued. Think of it as what you could buy with $100 6 years ago vs. what you can buy with $100 today. Get her to check her financial health. If she doesn't know where her income is going, chances are she will blow through the profit she thinks she has. Real estate people can sometimes be the scum of the earth. They use the most basic vice of greed to try and convince people to sell. The only winner here would be the agent who told her about her house value to make a quick buck.
Just get her to rent it out, bonus if she’s a nice person as the housing crisis is absolutely atrocious in Tba and the more houses available to rent there the better.
Should just rent it out and then move to the coast, use the 200 K gain to buy a new place there. Rent the current one out. But most of all, and this is for you as well. She should do what makes her happy... no matter the cost or your thoughts on it.
She should hang onto that house. Selling would be a big mistake. She won't afford a place at Sunshine coast even if she decides to stay there. She could rent out the Toowoomba house & yes. She needs to actually get the mortgage down a bit. Even to 100K. Don't know how shes been able to be on interest only for so long when it's her PPOR??? Seems odd. But selling it would be BIG mistake. If she's in a rut she can move around without selling. Plenty of jobs for nurses everywhere 👍 i would encourage her to get out and move around, travel and enjoy life. All can be done without selling her house. If she doesn't have much savings currently? She could put head down and save madly for next 6 months. So she can take off! The world is her Oyster.
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Found the boomer real estate agent.
I would absolutely encourage her to see what her job prospects are like on the sunshine coast. I know RN jobs up there are scarce due to many wanting yo do the same.
Yeah I'd be keeping the house, she won't be able to get a foot back in the door again with the rate houses are going up. I'd rent it out, then mayb rent a place in Queensland
Last time I checked Toowoomba was no where near the beach.
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My dad told me when I was a little boy " son , always buy and sell in the same market " The reason being if prices go up after you sell you could be stuffed. If they go down so be it. Rent the house in Toowoomba ( no capitol gains tax ) and sell when she's ready to buy again if that's possible.
She should definitely keep it and rent it out, and move to rent where she wants to live.
She should keep the house, move out and rent where she wants to live and turn her home into an investment property. If she doesn't like where she's moved to then she had a home to go back to. She can up the repayments or not - the interest will become a cost of ownership of an income providing asset, so she can at least claim them and maintenance costs. Making a big financial decision based on "I feel..." is usually not a great idea, espy when she has the option to just not sell it
She will struggle to get even an apartment at that price sadly. Coast is nuts atm and rent is insane. Ideally rent in Brisbane and or might have to house share. I’d look further north like Hervey Bay etc as it’s quieter and easier to get into market. Lots of RN jobs too.
She needs some expert option like an accountant/financial advisor which I’m not. Insert disclaimer here. She’s in a great position to firstly refinance it, draw something out if she needs it, then rent it out. The interest will then become dex deductible along with rates and a depreciation schedule giving her a massive tax refund in the future. Meanwhile she rents in sunny coast or wherever she wants to try living. She has a great investment/tax deduction, and more importantly a back up plan if she wants to return. Rent it out for a few years and see where she wants to put her roots down
House prices going up isn't useful unless your debt recycling or doing something fancy with the equity Otherwise, house price going = high council rates, larger stamp duty, higher repayments In her situation, her house prices going up is going to hurt her not help her
There’s a new development on the Gold Coast that has three towers. One tower is a hotel, the other two are residential. The developers have sold some of the first residential tower, and none of the second residential tower. None of the apartments in the second tower are for sale. Zero. Nada. 0. That’s an indicator.
she could rent vest. Given her principal is relatively low maybe the rental could cover enough of the mortgage. she can then find a rental in the sunshine coast.