Sell or hold in Kingsland
Question from nadia updated on 18th August 2016:
We own an apartment in Kingsland, Auckland which looks as though it has significantly increased in value since we bought it. It is not quite a positive cash flow yet: we contribute a small amount each week to cover the mortgage and body corp fees.
But, if we sold it, we could possibly buy another rental in somewhere like Hamilton, almost mortgage free. We know that Auckland property values are growing faster than those in smaller towns, but we feel like this could give us some extra cash in the hand for our daily lives.
What do you think?
Our expert Kris Pedersen responded:
Where you need to be careful is to keep in mind that you are likely to have exit costs involved in selling your Kingsland property. So you want to make sure the upside of where else you look at is worth it.
Start by getting an idea of how you think the apartment will go in regards to both short and long term. Then assess this against other options outside Auckland before deciding whether to sell or not. I would want to be very sure that the new opportunity was going to be better long term than the Kingsland property.
If cashflow is one of the main reasons to sell, potentially consider seeing if you can have part of the mortgage on an interest only basis or whether you can refinance down to the lower interest rates on offer at the moment.
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz