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Buy or Sell First – The Pros and Cons

Moving to a new home means you’re going to have to do something about your old one. But which action will you take? Will you sell it before moving? Or should you jump the gun and secure a new property while still living there? This is the age-old question that owners can spend a significant amount of time thinking over. Weigh the pros and cons of these options to ensure you pick the best one for you.

Buy or Sell First – The Pros and Cons

Moving to a new home means you’re going to have to do something about your old one.

But which action will you take? Will you sell it before moving? Or should you jump the gun and secure a new property while still living there? This is the age-old question that owners can spend a significant amount of time thinking over. Weigh the pros and cons of these options to ensure you pick the best one for you. Sell my house fast!

Buy First Pros

  • You will have a home already secured so you won’t stress if your old home sells quickly.
  • May have the ability to use equity in your current loan as a deposit for your new home.
  • You can spend as much time as you like shopping around for a new home for sale.

Buy First Cons

  • You might have to organize bridging finance between the two properties, giving you a time limit. This might limit the time you have to selling your old home.
  • If your old home sells at a less than desirable price, you may have to fund the difference in costs.
  • You might feel pressured by time and accept a lower offer.

Sell First Pros

  • The proceeds from the sale of your home can be used on your new one.
  • You will know exactly how much you can spend on your next purchase.
  • Time is on your side, so you’ll have the freedom to negotiate deals and offers for a better price.

Sell First Cons

  • If your home sells quickly, you could be left to make a rushed purchase on a new home so you have somewhere to live.
  • Local property prices could rise in the time between selling and buying a new home.
  • You might have to spend more to rent accommodation while between homes.

3 Things You Need to Know as a Property Investor

Entering the world of investment property is certainly exciting, but it’s important to get your head around the nitty-gritty. There’s a lot of jargon thrown around, so it’s worth taking the time to understand it. From vacancy rates to capital gains, there are various factors at play. They can influence the success of your property investment, so it’s essential to know what to expect and look out for.

Knowledge is Important

Entering the world of investment property is certainly exciting, but it’s important to get your head around the nitty?-gritty. There’s a lot of jargon thrown around, so it’s worth taking the time to understand it.

From vacancy rates to capital gains, there are various factors at play. They can influence the success of your property investment, so it’s essential to know what to expect and look out for.

Steer Clear of Empty

It’s essential to understand vacancy rates so you can make a sound investment decision.

When you choose where to buy a property, there are a lot of things to think about. One of the arguably most important factors is an area’s vacancy rate.

The higher the vacancy rate, the more properties in the area that are sitting empty without tenants. Of course, there are always going to be some properties that are vacant between tenants, but this should be for as short a time as possible.

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An area with a 2 per cent vacancy rate may well be a better place to buy in than a suburb with a 5 per cent vacancy rate. In the first instance, two out of every 100 properties are vacant, but the figure jumps to five in 100 in the latter example.

You should aim for as low a vacancy rate as possible, notes the Australian Securities and Investments Commission. Vacancy rates aren’t just important when it comes to finding tenants. If you buy in an area with a high vacancy rate, you could find it difficult to sell your property in future years.

Get the Money. Honey

In order to invest, you’ll likely need to borrow money from a bank or non-bank lender.

There are various options available to you, from coming up with a deposit to using the equity in your existing properties to enter the investment market.

If you’re borrowing money to invest, this is dubbed gearing. This can be positive or negative, depending on how much income the rental property generates against your ongoing costs.

Your lender can explain the finance options available to you when you’re choosing to invest.

The Ups and Downs or Capital Gains

You have to pay capital gains tax (CGT) in Australia, so it’s important to understand this concept if you invest in real estate.

If you choose to sell the property, you’ll have to pay tax on the difference between the cost to purchase the asset and the amount you sold it for, notes the Australian Taxation Office.

You can offset any capital losses against capital gains during the same income year, too. Subject to specific exemptions, CGT is not payable on your family home, but it is on rental properties.