When Is It Time To Sell Your Investment Property? | Century 21

When purchasing an investment property, buying at the right stage in the property cycle is crucial. When to sell investment property, however, is a more complex scenario. Selling investment property depends largely on your personal needs at the time and how each property in your investment portfolio is performing. 

Let’s look at some of the reasons it might be the right time to sell an investment property. 

The market is ripe for high returns 

If you invested some years ago in Sydney or Melbourne, where record house prices are now matched with historic low interest rates, you might consider selling in order to gain a considerable profit while these conditions still apply.

Your investment property is under performing

No matter how carefully an investor considers a property purchase, some just don’t make the grade. If you own such a property that is not gaining the rental return or capital gains you need, it could be costing you money and it might be time to sell and invest again elsewhere. Before embarking on the sale of the property, however, first discuss the issues with your Century 21 property manager and selling agent. 

Could you increase the rent? Are there some affordable improvements you could make in order to gain a higher rental return or selling price for the property? Is capital growth likely to improve in the area in the foreseeable future? Your local Century 21 real estate professionals will be able to advise you based on a solid foundation of local knowledge. 

To reduce the interest you are paying on your home loan

Selling an investment property you have held for some time and that now has a high level of equity can make sense if you use the money to reduce or pay off the mortgage on your own home, saving many thousands of dollars in interest on repayments. 

The property was initially your principal place of residence

If you lived in the property yourself immediately after purchasing it and moved out within the last six years you will not be obliged to pay Capital Gains Tax (CGT) on the sale if you make a profit. This tax benefit may make it worthwhile to sell the property while the time is ripe. 

You are fretting about the property

If a particular investment property is causing you endless anxiety due to problems such as poor strata management or difficulty finding and retaining good tenants, or you are facing a looming financial crisis such as possible redundancies at your place of work, it might be best to cut your losses. 

Property investment is generally a long-term proposition. Sometimes, however, it’s simply a great time to sell or you need to move on. Before considering selling an investment property, be sure to speak with your accountant regarding the tax implications. Will selling the property lose you important tax benefits through negative gearing? How much is the Capital Gains Tax on the profit from the sale likely to be? 

When selling investment property, it’s also advisable to speak with the local Century 21 real estate team in the area in which your property is located in order to determine the current market value of the property, costs of selling, whether you should leave tenants in place or sell the property vacant at the end of the current lease and whether some minor improvements could boost the property value. 

If you live at a distance from your investment property, the Century 21 team can also organise local tradespeople to take care of minor maintenance issues and a handyperson to keep the gardens well maintained while your property is on the market to ensure it achieves the best possible selling price. 

Posted by Administrator on 26/04/2017 at 3:58 PM | Categories:

1 Comments

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Rugs Store Melbourne wrote on 26/04/2017 8:44 PM

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