Investment property in Papamoa, Tauranga. Keep or Sell?

[Asmith]

Hi all,

I have been reading these forums for about 1 year now and hopefully you guys can help.

I brought a house in Palm Springs Papamoa Beach about 2 years ago. This was going to be a house for me to move into, however, I ended up staying in Auckland.

I have had this rented now for 2 years with very good tenants (only a few minor things) but it's not a very good "investment" property from what I get back on it. Currently rented for 545 p/w.

I am wondering if you guys see the area going up in value over the next say few years? Or should I just sell and buy a house in Auckland? Bought the house for 730k and have a 450k mortgage. I don't own anything else but I have been approved to buy a owner occupied house while keeping the one in Tauranga.

Any advice would be great.

Many thanks.

[Cousinit]

Nice area and should see good capital gain over the long term I would think. Sure enough if you sell prices will surge in coming years ha ha. I'd be leaning towards holding if it was me .

[mortgage broker]

I would keep and buy. When you are trying to buy the third and you decide you need better cash flow, then you might consider selling. A strange man once told me, dont sell until you need to and don't buy in a fashion where you might forced to sell later.

[Rosco]

These kind of questions are really hard, and depends on your over circumstances. I would suggest getting advice from an expert.

Tauranga seems to be building too many houses and seems that it will have an oversupply. Try and find some information on the population growth in Tauranga area in last year, vs the number of houses built. Last time I looked, Tauranga was building more than it needed. I listened to Matt Gilligan a few weeks ago, and he seemed to have the same view of Tauranga.

Also if you are going to buy a new personal house. Generally you want to recycle your equity into your personal house. You situation is a little different, so I would suggest expert advice, but attached is commonly how this is done - https://www.cswaikato.co.nz/index.ph...n-auckland/183

But first - if your property a good rental? Cashflow is only part of the picture, and currently I'm guessing you are around breakeven or $1000 negative with all expenses considered. If the rental has full debt, it is about $ 13,000 cashflow negative before tax (which is likely to disappear at some point)

Hope this helps

Ross

[Asmith]

Thanks everyone, this gives me a lot more to think about.

Ross - it is not a good rental so i think the best way would be to move it and buy a personal home then use the equity to buy a better investment property. Thanks for the advice.