Hello,

Six years ago I brought a property in Linwood Christchurch (eastern suburbs). In the last year I've renovated it, new carpet, painted internal walls, redone the kitchen and in the next couple of months I'll do the bathroom. A 23 year old house will be in very good nick. I've been careful not to overcaptilise.

There is a small region of brick that needs to be reclad from the Feburary earthquake, but otherwise the house is fine. It's in the green zone.

I had originally hoped to sell the property to a young professional or couple as it's very close to the city centre (just outside the four avenues), local bus routes, etc. However without a CBD that plan doesn't work.

I'm looking at moving in with my girlfriend and have therefore been thinking about renting the property. My question really revolves around whether you'd think it's worth holding on to the property as a long term rental or whether I should aim to flick it on.

Figures: 92m (I think) living space. 2 bedroom, lounge living area, garage and secure back yard.

I paid 190k for it six years ago. the GV is 207. I'm sure with the renovations, both internal and external I could get a resonable amount more (am thinking 230k). I am going to get it valued later this month.

Looking at other rental prices in the same neighbourhood for similar dwellings I could get enough rental to pay the mortgage, maybe even the rates.

I 'assume' the rental market in Christchurch is in favour of the owners at the moment but don't have any real facts to back this up.
My house would be ideal for an older couple, perhaps displaced by the earthquake but wanting to remain in the eastern part of the city.

My thinking is that there's much scope for captial gain on this property. Therefore, why pay out lots in interest on the mortgage when I could take my winnings and move up the ladder or even build new. i.e. if I hold on to it for 10 more years am I going to lose the capital gain in interest repayments.

My question is, do you agree, what is the gain potential on a property like this and am I better off selling?

Thank you,
PP.