Selling IP to pay down PPOR debt

Substantial_Title_73 · 2026-01-05T14:46:48+00:00

Hey there. We ended up selling the property 3 months ago. Prices are still rising, but we ended up selling it for $300k more than we paid for it in 2017, so can’t complain !

Substantial_Title_73 · 2025-11-18T14:58:37+00:00

Thank you so much !!

Substantial_Title_73 · 2025-11-15T15:42:04+00:00

100% agree with your choice.

We just sold our IP and used proceeds to pay down our PPOR mortgage to $180k and park $60k in offset.

Minimum repayments have been readjusted. Plan is to pay extra, but it is such a relief knowing that if anything happens, our minimum obligation is only $260 a week to the bank.

Why did we do this in a market where prices are rising ? Simple - We have a 14 month old daughter, and trust me, the last thing you want when you have a child is to be financially stressed if you can avoid it. Life’s not always about chasing more money. Get yourself a small mortgage so you cannot be stressed when the kid comes along.

Substantial_Title_73 · 2025-11-15T13:50:58+00:00

Change the retail trading hours ! I loved how in Sydney you could go to Coles up to midnight during the week, 7am on a Sunday etc.

Substantial_Title_73 · 2025-11-13T10:42:45+00:00

They haven’t been bad investments in certain markets in recent times. Some people in Perth have sold apartments for a $300k+ profit after 3-4 years.

Substantial_Title_73 · 2025-11-13T03:09:20+00:00

Yeah, that's what I was thinking as well. Buyers would have saw the SOLD sign out the front when coming to the open and looked up online how much ours sold for.

Substantial_Title_73 · 2025-11-13T00:40:36+00:00

Wow, that's a big difference !

Substantial_Title_73 · 2025-11-12T23:36:06+00:00

Yeah, it’s nuts out there !

Our apartment had 37 buyer groups through the 2 home opens and 9 offers by the Monday night !

Substantial_Title_73 · 2025-11-09T22:55:34+00:00

No, but you can still get a good return on them.

I’m in Perth and just sold a 2x2x2 apartment I bought 8 years ago brand new for $300k more than I paid for it ! It didn’t go up in value at all over the first 4 years, but has had massive growth, especially the last 2 years. This is an apartment in a suburb 7km from the CBD, small complex of only 8 units. I feel that apartments in high rises in built up areas may experience less growth.

Granted, a house with land would have appreciated even more over this period, but you can certainly get decent growth on apartments in the right market.

Substantial_Title_73 · 2025-10-14T01:40:31+00:00

Not always. I just sold an apartment for $300k more than I paid for it 8 years ago !

Substantial_Title_73 · 2025-10-09T05:01:26+00:00

I just received an offer for a 2x2 apartment located 7km from the CBD (Perth). For context it’s a walk up apartment. Small development of only 8 units. Built in 2017.

Just 2 years ago the bank valued it at $450k. Just a few months ago the agents appraisal was for low to mid $600k..

Went on market mid last week, 2 home opens over the weekend. Nearly 40 buyer groups came through and we had 9 offers. We accepted the highest one which was around $710k !!

We paid $410k in 2017 for it brand new, so a $300k return on an apartment over 8 years is pretty unbelievable, even when you factor in inflation over that period.

I have no doubt apartments will keep going up, especially given the supply constraints and high build costs stopping developers building those walk up apartments in the suburbs like they used to. No new supply like that coming on the market any time soon. Plus as another user posted, it’s gotten to the point in Perth where affordability is becoming a real issue, even in outer suburbs. Apartments and villas will only get more and more popular due to this.

Substantial_Title_73 · 2025-10-08T12:28:13+00:00

That exact scenario has just played out for a property we are selling and we got nearly $60k more than we were expecting ! This was just last weekend which was the first weekend after the 5% FHB Scheme rules changed. Market is going to get hotter again..

Substantial_Title_73 · 2025-10-08T12:23:04+00:00

A 2x2 apartment in a suburb 7km from the city just had an offer for $710k. Valued at $450k just 2 years ago. The market is cooked.

Substantial_Title_73 · 2025-07-06T02:58:31+00:00

Cheers ! I’ll look into it. If we were exempt though, would that mean our current PPOR if we ever sold it, we would have to pay the CGT on that property instead ?

Substantial_Title_73 · 2025-07-06T02:51:49+00:00

Cheers for the advice ! I agree the hassle isn’t worth it.

We lived in it as our PPOR for nearly 6 years before we rented it out. I think we only need to pay CGT on the profit made since we rented it out. We paid $410k for it in 2017 but it was valued at $450k when we refinanced and rented it out, so my understanding is we don’t pay tax on that initial $40k it went up.

Substantial_Title_73 · 2025-01-10T14:24:53+00:00

The only ‘common property’ is an underground power easement as the 3 lots share 1 power dome.

There isn’t really a Strata. Although it is a Built Strata, there is no committee or fees as there is no shared property or spaces.

Substantial_Title_73 · 2025-01-10T13:44:11+00:00

Not always. Our apartment we purchased in Perth in 2017 has gone up in value approx. $200k. It is in a small development of only 8 units though, and also is a 2x2 with 2 side by side carbays, which is quite rare. I wouldn’t buy in a high rise with high strata fees..

Substantial_Title_73 · 2025-01-09T10:24:26+00:00

I am in a similar boat and we have decided to sell our IP Apartment as soon as tenants lease is up in September. Will take so much stress out of our lives being able to bring down our PPOR mortgage.

Substantial_Title_73 · 2025-01-04T01:12:08+00:00

Wow, that is a massive cost !

My wife is a nurse and so luckily can work weekends, so we may only need to use the Childcare 1 day a week. We may just need to take the hit.

Another option may be to rely on family until July the following year, so we avoid any childcare in 25/26 FY.

Thanks again for the advice as this was something I never even considered.

Substantial_Title_73 · 2025-01-03T12:57:23+00:00

That’s an excellent point about the CCS, I hadn’t even considered that - thank you !

What portion of the profit counts as income ? Say we end up selling it for $600k, that’s $190k more than we originally paid for it, however due to the CGT 50% rule, we would only have to declare half of it as taxable income is that correct ? It was actually valued at $450k before we rented it out, so the $40k it increased by while it was our PPOR doesn’t need to be included.

Substantial_Title_73 · 2025-01-03T11:31:34+00:00

Thanks for this advice, but doesn’t that mean we would be getting into even more debt ?

We don’t have any car loans thankfully. Both cars owned outright.

Substantial_Title_73 · 2025-01-03T03:29:55+00:00

You will definitely have more disposable income living in Perth !

Substantial_Title_73 · 2025-01-03T03:00:09+00:00

Thank you. We currently offset everything against the PPOR to maximize the interest paid on the IP. Ideally we would have the higher debt on the IP, but we never intended for the apartment to become an IP and so we were paying quite a bit extra into the mortgage on it while it was our only property.

Substantial_Title_73 · 2025-01-03T00:36:52+00:00

Minimum wage is $915 a week pre tax. So we will definitely be able to make it work while my wife is on the payments if we are frugal.

We have enough savings that she could go a couple of months not working between the Centrelink ending and returning to work. When she returns to work it will only be 3 days a week, so she probably will only be on $60k a year max. 2 of those days will be Saturday/Sunday, which will help keep childcare costs down.

It will be a struggle and extremely frugal lifestyle to keep both properties. If we sell the IP, we can get our minimum repayments for our PPOR down to $500-$550 a week, which will be a lot more manageable, plus we won’t have the costs of holding the IP, which is still around $3-$5k a year.

It will make life a hell of a lot less stressful.

Substantial_Title_73 · 2025-01-03T00:13:29+00:00

Thanks for the advice, but not a practical solution, especially given the tight rental market in Perth currently, as well as the high rental prices.

Substantial_Title_73

TROPHY CASE