My god Kahuna1 why would you tell someone to sell a positively geared investment property? , the return is probably more than the interest payable on the home .
CAPITAL RETURNS ... is why .... I dont know the property but 100% of all assets in one class making maybe ... capital appreciation is NOT as good as buying prudently a share, when its got no friends, a decent company which will appreciate at inflation and PAY ... Return an income after tax ... and franking credits of 5% MORE ...
Your ahead of the investment property EACH and EVERY single year ... by a very long shot.
Its simple maths. Putting all the loans against the investment properties and claiming an allowable tax deduction ... if you decide the property has MORE upside due to say some special reason, again .... getting say a 20k tax deduction and not paying tax on 20k income say at close to 50% marginal rate for the top end of your income ... is WHAT a good financial advisor or a top line accountant should tell you. All be it for $500 an hour or so.
It is a pragmatic and hard nosed approach which one must take. Having the investment property which YES due to a large portion of the value being NOT leveraged you break even on the interest of the leveraged portion of the value, SOUNDS nice, but its a wank !! If you make 1% over inflation .... on capital appreciation and over time with repairs and so on break even on the loan service .... in 10 years your maybe 10% ahead !! Maybe. Sure rents go up, but so too do other costs and rates and so on.
I prefer, taking the say 400k out of a 750 k investment and getting a 5% return on the 400k and being ascab buying into terror and selling or reducing into times like NOW ... getting an overall above inflation outcome of say 5% ... if not a lot more, instead of ending with a 10% or 20% at the end of 10 years ... you end up with 5% income times 10 years plus 5% above inflation after 10 years and compounding as time goes on, well .... one .... MAYBE and MAYBE 20% return ... the other, with some work and supreme discipline and NOT trading but buying out of favor blue chip stocks ... with dividends and you end up with not a REAL return of 20% at best but one that's 250% or so.
Your question and .... belief ... obviously is not based upon any fundamental analysis or rational basis.
Maybe, as I said the investment property has redevelopment potential or some other factor which makes it different, say a massive block with added things, but that ... to one side, the long term holding of an asset that likely will whilst do well, fairly safe, but not even in the same ballpark as one that's producing an income and if your judicious in your buys, and patient to reduce and take some risk OUT from time to time, their is no comparison in the two as long term investments.
NONE. Buying for example a long list of quite decent stocks, massive ones late last year such as a few banks like NAB, WBC and so on, a longer list of very much out of favor great and massive companies and listed infrastructure things with yields that hit 7% or so late last year, and hey presto, now 25% higher and in some cases 40% even 100% ....
is not something any property is likely to do. Sure we are in interesting times, but buying something and being paid 7% tax free with franking credits to hold and be patient and then going, OK .... let the new hero own it at 4% yield or 5% ... await the next correction and as the price slides, the yield and dividend potential rises and you go, OK i sold it at $28.50 at $26 its getting cheap, at $25 very cheap and at $24. well the world ends, or Its a good buy ,,,, and 7% yield with franking credits and tax paid ....
Hard investment strategy but holding a unit in a decent area that MAY increase at say 3% over 10 years a mere 1% over inflation over 10 years whilst sounds nice, the kitchen is now needing replacement and bathrooms and whilst 30% sounds good, I have taken this OUT of the returns one must demand from investments in stocks, Bottom line you need 3% for just inflation and 8% .... overall which requires some work from time to time to let things go ... when things go well and then conversely as cash piles up ... from dividends and divesting a bit at one extreme and sometimes a lot, in times of euphoric stupidity, the pile of cash or slight leverage on a share portfolio ... say 10% on the DIP .... you go from 110% invested and over a few years, to 10% in cash if no standout cheap stock strikes you and if your your lucky, you sell a little more at the top end of things and reduce ... to say 70% overall invested, market has a cow .... goes down 15% ... as it will and does periodically, your back 100% in vested or 110% invested and start it all over again.
Complex but a plan. A good one, which well is LOST on most.
Take care