The affordable housing organisation that had been leasing our investment rental property for the last few years gave us 21 days notice that their tenants are vacating (at the end of next week). As they will not be putting in new tenants, we would have to find new tenants for the property ourselves (via an estate agent), but since the property is about 50 years old and rather run down, we'd first have to spend quite a bit of time and money bringing it back up to scratch.
In the current economic climate in the eastern states of Australia there doesn't seem much prospect of large capital gains flowing from residential property in Sydney (average prices were down around 5% over the past year, and are likely to remain weak for a while longer), so it doesn't make much sense to hold onto this property.
After giving the property a quick patch up (some new tiling in the bathroom and gyprock in the entrance hall ceiling to fix where the plumber made inspection holes to look for a leaking pipe) we'll put this property up for sale. After paying some capital gains tax and paying off the remaining mortgage on this property, the remaining equity should be sufficient to pay off a large part of the mortgage balance on our own home. We can then afford to make principal and interest payments to pay off our remaining home loan balance before I reach retirement age, as well as have some spare cashflow to either invest in shares (or pay off some of my margin loan balance) or contribute into my superannuation account.
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