What should i do now?

[David O'Connell]

Hi,

I am new to this so please bear with me.  I am a 45 and looking for a bit of strategic property advice. 

We own our family home and three investment properties.  There are mortgages on all four properties.  Capital and interest on the family home and interest only on the investment properties.  Initially the investment properties were bought for the capital appreciation (some we lived in but didn't sell) but with hindsight they were bought too expensively in a bubble market.  There was 20 to 25% equity in them all but during the crash they went into negative equity.  Thankfully with the low interest rates the repayments have dropped significantly (they are all on base rate + margin trackers) so they are currently cash generating. 

So the current situation is that they are beginning to be back to the value of the loan amount or will be in the next 2-3 years so I could sell shortly and get out (reasonably unscathed) or I could hang on for another 10 to 15 years.  I believe that they will slowly averagely increase in value over that period as they are all houses in reasonably good areas.  The cash flow is positive and after interest payments and expenses is treated an income so the taxman takes 50%.

Here is the question.  Should I use the cashflow from all three to paydown some or all of one of the properties so that when I have to sell in 15 years (as the mortgages come due) I can hedge my position and probably get it back with a bit more depending on market position, or do I use the cashflow to invest and keep the money out of the properties.  I could still use this money later on so balance up the values if the market is not where it needs to be when I have to sell, or do I get out when I can at breakeven.    

Sorry for the long post, any thoughts or comments would be appreciated.

Thanks