Selling Bricks

I can envisage a very different summary of how we financially “did it” verse our plan. I think this is inevitable for many people, but at a high level we have, for a long time, been relying on selling an investment property to fund a substantial chunk of the boat purchase.

Like many of our past decisions, buying this unit in 2010 had been a vision to invest smart and for the medium-to-long term. As we have got closer to this goal it’s clear that whilst we didn’t know what we would do with that investment, we knew we would do something. That something would have certainly been “big” and so taking the hit was going to be worth it. We have all been taught the value of saving and investing, but money is there to be enjoyed as well and I don’t believe in squirrelling money away for no reason, but also to benefit later in a meaningful way. Sadly, retirement may never arrive, and if it does it could well impose restrictions on how we enjoy it anyway - physically, mentally, financially, etc. Life is to be lived now!

The unit we purchased in Sydney was, in the end, close to the top of the market. Whether that’s bad luck or lack of full independent research I don’t know, and frankly I think that’s less important. We gambled a bit but knowing it wasn’t going to flip quickly, we invested with good and sound principles. Two bed, close to transport, schools, hospitals and shops. We could have gone for a higher risk investment for potentially bigger return, but that’s not our style. It rented immediately and I’m happy to say that we had to put very little into it by way of maintenance, and we've had content and reliable tenants in it uninterrupted since 2010.

The property market in Sydney started to turn away from its throw ever so slightly earlier this year. And so, we felt it was time to shift the investment for the big adventure. We set about selling it in Spring (typically later in Summer would be best, but we didn’t want to risk the Christmas slowdown). We happened to engage the very same agent that we bought it from, confident in their knowledge of the target market.

Unfortunately, we had a lull and had to reduce the price. The media typically causes periodic fear which certainly reduced interest. In the end we closed lower than planned but knew that exiting now would still give us a very healthy return. (For those interested, netting out about one third of the boat value.)

This was a big milestone and a little bittersweet - there was no going back now! Whilst we had never lived in it, this was our smart investment that would have continued to yield. But one major result was removing a significant debt. Whilst we weren’t heavily leveraged, as time and overpayments helped decrease our LVR (Loan to Value Ratio), this allowed us the opportunity to reduce our burden on paper for our future unpredictable income.

Whilst it is trickier to execute from afar, it’s not an uncommon process to sell from overseas and we were able to relatively easily get the paperwork done in good time. Never a stress-free process but this was, I think, pretty smooth.

Sold!

-Ben