the OP should definitely sell the rental property - it's a poor investment given the financing rate and the equity would be better employed elsewhere.
gross yield of less than 7%. ......... a net yield of around 5% ....... very inefficient from a tax perspective
far better advised to realise whatever equity remains in the rental and using this to reduce the size of the mortgage on the new family home.
wow, while I do like simplicity, are things really that black and white?? Most definitely not imo.
1 Current investment property not costing anything (marginal at best) in net cash loss terms so no need to panic (any contribution is against the capital so that is savings)
2 He needs to decide what he/wife want to do re sorting themselves out with a house
3 He bought at 350, current value 230. Down 120k or 35% in value vs what he paid. Needs to consider whether he really want to cash out that loss or if preferable to hold longer term as part of overall investment and pension planning. He says he doesn't need to sell to buy.
4 Poor investment with a gross return of 7% and net return of 5%?? Most people would love these returns.
5 Inefficient from a tax perspective? All pure speculation.
wow, while I do like simplicity, are things really that black and white?? Most definitely not imo.
Personally I would find it tough stomaching a 120k cash loss by selling now
2. I don't need to sell the house to help me purchase another house for deposit or additional morgage reasons.
I don't think you should look at this purely as a "what to do with the rented house" question. You should be looking at what you plan on doing for the next few years and where does the rented house fit into that
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