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The Trio enjoy fielding this second question from a loyal, long time listener, Alison. Only last year, Alison reached out to ask the Trio to weigh in on a stay/move question. Alison and her daughter were living in a recent purchase on the inner-side of Melbourne's Nepean Hwy, but missed their days by the beach in their former home. Alison had purchased a four bedroom townhouse on 'the other side', but aside from missing her beach life, she also found the home was too big for their needs.

The Trio encouraged her to make the move back to their old stomping ground, and Cate recalled some of her happy days in her old 'hood in beachside Mentone too. Alison, now 47, took the plunge this year. She rented out the four bedroom townhouse and purchased a three bedroom unit back on the beach side of Mentone.

This time, she writes to the Trio to ask about their thoughts on whether she should retain the four bedroom townhouse, or whether she should sell. With all of the changes to land tax and possible changes to planning laws, ongoing rental reforms and heftier interest rates, Alison is feeling a little bit nervous and wondering what the Trio think. She notes that her large townhouse is projected to be cashflow neutral in six years, but she is also mindful of the pressure she faces as a sole bread-winner. She is also managing a property in the Bass Coast and while her long term intention is to retain this property into retirement, Alison throws out the question to the team about her entire portfolio.

"Do I hang on to the 4 bedder and wait until it has enough value to clear my ppr mortgage? Or should I hang on to it for the longer term- past 6 years until it is earning me money? I know it won’t be for a long time."

First and foremost, the Trio congratulate Alison on her achievements and in particular, her ability to pivot quickly.

According to the Australian Landlords Association, landlords own more than 80% of rental properties. Despite this significant contribution, it often feels like landlords are somewhat overlooked (and in some cases, trampled on) in discussions focusing on the challenges facing renters.

Dave starts with Alison's property planning and shares some astounding projections. Alison currently owns $2.92 million worth of property at age 47. If Alison is able to hold onto these assets over a long term growth rate of 5% per year, by age her wealth position will be as follows:

• 60 - $5.36m
• 65 - $7m
• 70 - $8.8m
• 80 - $12.94m

This gives listeners a glimpse into the power of time. Dave also delves into debt retirement and timeframes for cashflow neutrality.... tune in to hear more.

The Trio then step into Alison's future rental returns and they also consider the necessary evils; land tax and other taxes. When it comes to property portfolio management, knowledge is power, and cashflow is king.

Dave's overview is valuable and his preference for targeting capital growth assets comes to light in this listener Q&A. Tackling interest costs, short term cash shortfalls and buffers is a popular theme for this gripping episode, but what Cate shares in relation to rental growth is important for Alison to take note of. Like a strand of DNA, the rent does broadly grow in line with the rate of capital growth, but not always in perfect synchronicity. Gross rental yields are typically elastic, and Alison can look forward to enjoying long term rental growth at the same rate as her capital growth rate.

From selling Bass Coast to selling the townhouse, holding all and working hard for more years, the Trio each share their thoughts, pro's and cons, risk mitigants, and they each give Alison some good food for thought.

No divestment decision is easy for investors, and Alison gets three points of view in this Listener Q&A ep.

And our gold nuggets....

Mike Mortlock's gold nugget: Mike shares a carrot and stick analogy. The stick is the tax, but the carrot, (the capital growth) is harder to focus on because the stick can hurt. It's important to remain objective.

Dave Johnston’s gold nugget: "The starting point for any successful property plan is understanding the numbers and the long term implications for any options and choices that you have in front of you."

Cate Bakos's gold nugget: Cate uses a real-life, personal example to share with listeners the power of time.

Show notes: https://www.propertytrio.com.au/2023/10/09/sell-or-hold-listener-question/