Should You Sell A Positive Cash Flow Property In Sydney To Buy in Queensland?
Should you sell a property in Sydney to buy more properties in Queensland?
Ryan: “Is it better to sell a positively geared property in Sydney to buy more properties in Queensland? I feel as though I should hold on to the property in Sydney because it has better long-term capital growth.”
Ben: Yeah, I don’t think selling a property in Sydney, if you’re looking at that for the next 15 to 20 years especially if it’s positively geared now, is a smart thing to do. One thing you mentioned though is that Sydney has out-performed Brisbane.
If you look at the last 20 years, Brisbane has out-performed Sydney, and if you look at the last 46 years, Brisbane, on average, year on year, has out-performed Sydney and Melbourne. It’s just in the last 10 years that Sydney has gone crazy.
I don’t know if the statement about Sydney is better than Brisbane long-term in terms of capital growth because Brisbane’s starting at a really, really low base right now. It’s very affordable compared to the average income.
Ryan: But I think it’s-
Ben: [crosstalk 00:00:57] that property to buy [inaudible 00:00:58] right now.
Ryan: I think take the time and look at your property or your property portfolio and to say, “Okay, here’s where I’m at right now,” and then actually set your goals and say, “Okay, what do I want to achieve in what time span?” Then start to map out, “How can I get there?” How can I get from where I am now to my goal of whatever passive income it may be or equity or whatever it is that your goal is? Then map out the different options, so look at keeping your property in Sydney.
How will that affect it, and what else will you buy? How will you achieve your goal if you kept that property? Then also look at it about how would you achieve your goal? Let’s say you sold it and then you bought properties in Queensland, how would you achieve that goal?
Don’t be over optimist and put Sydney at 1% growth and then put Queensland at 20% annual growth. Let’s not be silly here, right? You got to hope for the best but expect the worst. That would be my advice because it’s so specific to your situation. We can just sit here and say, “Okay, Sydney or Brisbane or Queensland, which one’s better?” but that doesn’t relate to your specific situation.
Really, the better advice would be to look at your current situation, look at what you want to achieve, and work out what exactly is it going to take to achieve that. Then hopefully the answer will come out of that for you. You won’t even need us to say anything to you.
Ben: Sometimes what comes out the back of that is if you hold that property in Sydney for another 10 years and you maybe buy a couple of more affordable properties in Queensland now, possibly with the growth you’ve already received plus the growth you might get in the next 10 to 15 years in Sydney will mean that you can sell that one property and pay off the two properties in Queensland completely outright and debt-free.
Sometimes holding an asset now knowing that it’s going to compound in value over time and then selling it at a strategic time in a low-income year and paying off some debt completely outright can be a much smarter way than selling the properties now and not getting that compounded or compound-on-compound growth effect over time.
Ryan: I think a good piece of advice for everyone listening is whenever you’re asking a question like this, so it’s not going to be specifically this, but whenever you’re saying, “Should I do this or this?” change the word ‘or’ to ‘and’ and just see what your mind comes up with.
Rather than saying, “Should I do this or this?” say, “How can I do this and this? How can I do both?” “How can I keep this property in Sydney and buy multiple properties in Queensland? How can I do both?” Then you’ll be amazed at that the things that your mind comes up with.
That it might not be that specific question, but if you get in the habit of doing that, “How can I have this and this?” don’t ask yourself all questions, you’ll find yourself in a much better position in the future. How can I have a business and have an epic lifestyle? That’s the question I asked myself for years and worked on for years and achieved, so, yeah.
Ben: I love that, man. What an awesome way of thinking about things.
Ryan: Well, I hope you enjoyed the answer to this question with Ben Everingham from Pumped on Property. We’re really having a blast doing these Q&A sessions with you guys so keep the questions coming.
If you’re at the point now where you’re ready to purchase an investment property but you think you might need some help, then Ben is offering free strategy sessions to On Property listeners. Simply go to onproperty.com.au/session.
You can book your time with Ben, and you can go through where you’re at, where you want to be, and what your next steps are to get there. So again that’s onproperty.com.au/session. Thanks so much for watching, and until next time, stay positive.