Sad but glad - Opinion's needed here

[pooky]

My partner and I are seperating (amicably I might add - it's the sad but glad bit), and looking to sell up.
We've got a mortgage free house and 2 investment properties which have almost broken even cash flow wise. I'll give you some figures, then ask the question.

IP 1 - $140,000 mortgage (1080 a month), $250 wk rent
IP 2 - $136,000 mortgage (1048 a month), $265 wk rent
Both are property managed at 8% of rent.

Both houses, if sold, would generate $50,000 profit each after costs etc.
If all houses were sold, we would both have $275,000 in the hand after costs.

My question is this and the answers will be subjective but I'm curious what you think.

Is it worth: a) paying my partner $50,000 for her share of the IP's and keeping them (reducing my in hand amount to $175,000).
or b) sell the lot, buy a new house with a small mortgage and start again.

cheers

[RentMaster]

Hi Pooky

I wont give you an answer, but a bit more food for thought.

Selling the whole lot and buying again costs money both when buying and when selling. You have agent fees, new mortgage fees, maybe fees to break an existing mortgage, legal fees etc.

Are the properties good properties? Would you consider buying them again, or would you be glad to see the end of them?

Do you have good tenants you would like to hold on to?

Good luck with your decision making.

[Dean@Massiveaction]

If you're parting amicably why not keep one IP each. If your ex doesn't want one then absolutely buy her out. NEVER is the best time NEVER to sell good IP's is NEVER.
If they're in an LAQC you can change the shareholding, if in a trust change the trustees and/or beneficiaries. If in your own names then tell yourselves off for not planning properly and get them sold into a trust or leverage the mortgages up and get them into an LAQC. BUT DON'T SELL, especially in the current market!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!

[whitt]

My 2 cents.
The answer to your question is both the replies from Rentmaster and Pooomba.
*If they are bad properties consider selling and re-investing.
*If they are good you are fortunate enough to have a couple of options.

[pooky]

Thanks for your replies.
The properties are good - 1 is near university so I've never had a problem with it being rented out. The other is in an average area but 200 mtrs from a shopping mall on a quiet street - again, a good renter but have an interesting tenant in there at present. Pays on time, but a perfectionist. But I'm getting off track.
My partner and I have been going over all options so your feedback is great. She wasn't interested in the split idea (it was my first choice). Rentmaster is right about the costs of selling etc...thats what out me off but the emotional effort involved too. Just seemed like a waste.
Plus, anyone whose broken up with someone knows that the emotional compass swiings all over the place so it's nice to have some focus.
Oh and they are in an LAQC so I assume its just a case of removing my partner as a shareholder (I'm the director) and talking to the accountant with regards to the removal for the 2006-2007 financial year.
Thanks again Rentmaster, Whitt and Poomba.

[artemis]

I don't like the buying bit of IP - a lot of time, effort, $$ and lost weekends. You may not feel the same way, but if you do then I'd suggest hang onto both IPs if you can.