We are moving interstate. Should keep our current unit and rent it out or sell it to buy a new place in the new location?

Q.

My partner and I are both in our 20's (25 and 22) and own a three bedroom unit in regional NSW worth about $240,000. We've had it about six months and still owe about $210,000 on a standard variable rate mortgage. Our household income is about $85,000 dollars a year. We are thinking about moving back to Melbourne. Our household income would be well over $100,000 if we do move. But we are unsure if we should keep the unit and rent it out (we could get about $280 a week, current mortgage repayments are a tick over $300 a week), or sell it while we're renting in Melbourne whilst looking for a place to buy.

Your best option depends on your view of the potential of the unit. Based on the information you have supplied it shouldn't cost you much out of your own pocket to keep the unit so provided you believe it has a good future it would make sense to hold it, otherwise you will lose a considerable sum in buying and selling costs. If you do keep it, make sure you move the loan to interest only to maximise your tax benefits.