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hi there,

i - or rather a trust owns the above property in epsom, and for all intents is 100% financed, so interest alone is costing $84k p.a plus associated costs - maybe another $8k p.a so around $92kp.a cost versus $62k p.a income.
the above house was my PPOR, until i bought another place in the same street, and renovated, and decided to rent the previous house.

the trust has 4 other properties as security, and R/C account of $150k to cover shortfalls over the next few years, so financially it is doing fine at the moment.

basically properties are worth $4.6m with total loans (including the R/C )of $3m so lvr around 65%.

i guess what i am asking is the property provides a lousy gross return / yield, and obviously a negative net return, but you would assume that it would provide a good capital growth in this market ? so should i keep it ? or sell it into a hot market.

the house owes me / trust $1.3m and was valued 3 month or so ago at $1.625m - which i would possiblyget maybe $1.7 or $1.8m for it at auction.

this would reduce the trusts debt to less than half, and would put the trust into a positive return situation.

today i dont need to sell the house as there is no problem in finance, and even if the interest rate went to 9% i still would not need to sell, as i could easily afford the repayments.

but a house that loses 30k p.a, and if the interest rates rises - the loss could be as much as 80k loss per year, you have to pray for capital gain !

any ideas ?