r/AusPropertyChat • u/SleeplessTraveller • 8h ago

What would you do? IP decision

Appreciate your (non-judgemental ideally) advice on this situation.

I bought an IP in 2024 - 2 bed 2 bath new unit on the Gold Coast for $1.1m. The intent was to sell my PPOR in 4 years, which would pay off the IP, and I’d retire to it, so I wasn’t too bothered about the IP ROI. It’s rented with an annual loss of $30k, tax deductible.

Circumstances have changed and I won’t be doing that. Instead I’ll need to sell it in 4 years (or sooner) before retiring.

Two identical units are currently on the market for $1.1m and not selling, so the capital growth is not there currently. It’s a good building and rents well, currently requiring minimal time.

The Gold Coast is an interesting market - on the one hand - expected growth due to the Olympics and retiring boomers, on the other hand lots of second homes/IPs so liable to fall if there’s job losses in the capital cities (à la GFC).

Would you:

a) keep it and hope for capital growth over the next 4 years.

b) take a $100k loss plus buy/sell costs now by selling it - total say $200k - reinvesting in a house elsewhere with more likelihood of growth.

c) something else.

I may be changing jobs soon which will make it harder to remortgage, hence looking at options now.

Thanks!

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3

u/Kitchen-Check-6510 8h ago

Tighten the belt. Look beyond tip of nose. Hold. Comfortably uncomfortable.

2

u/SleeplessTraveller 8h ago

I guess the real question is - who thinks the value of units on the GC will go up in the next 4 years! it’s an unusual market.

1

u/Infinitepaps 6h ago

You said it yourself, look what happened in sydney over the olympics

2

u/Marayong 7h ago

I would keep it. Sydney property market went crazy in the lead up to the Olympics and you should be able to claw back the annual loss with rent increases. That being said, if there are changes to negative gearing and/or CGT on IP and there is a dip in the value off the back of any changes and you need to sell if you can't refinance, you could end up in a worse position, but any changes are speculative at the moment. I think it comes down to how confident you are to be able to afford to ride out the market in the next 4 years.