Should we sell our investment property? We owe $890,000 against a property valued at $1.1 million. It was working for us when interest rates were low, but today we have to find at least $2000 per month to plug the gap between the rental income and the mortgage repayments . And that is provided there is no maintenance or other issues.
Inflation has proven to be stickier than the Reserve Bank would have hoped. Whereas at the beginning of the year, there was an expectation that interest rates would fall in the back half of 2024, today most commentators seem to be guessing at drops in 2025 at best. There are some who even suggest rates may need to rise further.
I don’t possess a crystal ball to be able to tell you when rates will fall and your investment will become more affordable. You are in a positive equity position here, so if you choose to sell, you will walk out with cash in your pocket. I’m a 54 year-old and have been salary sacrificing 6 per cent of my wage to super since I started work as an 18-year-old. It is a state government defined benefit type and my current projected benefit at age 60 is roughly $2.3 million. My wife has about $200,000 in superannuation. Our mortgage is currently $195,000 and we have no other debts.Defined benefit funds come in many varieties.