Owning an investment property can be a challenging experience. Dealing with high mortgage interest rates for an extended period, along with big increases in council rates, insurance and maintenance costs, it can feel like the cards are stacked against you.
If those costs are so high you end up having to work just to maintain and pay for your rental property, it's natural to wonder whether it's really worth keeping.
Would you be better off with that money invested elsewhere?
Investment property owners often see a slight improvement in market conditions as an opportunity to cash out. To secure gains that may have been made if you've held the property for a while. But is that the right choice?
And if you do decide to sell, when should you do so to maximise your return?
These are common questions we talk through with investor clients, and as you can imagine there are no easy answers.
Timing the market is beyond challenging, and anyone who ends up selling at the peak of a boom period is likely to be extremely fortunate rather than prudent.
Typical Property Market Cycle:
Boom (2-3 years) -> Correction (6-12 months) -> Plateau (3-4 years)
Please note: These timeframes are indicative only. Every cycle is different.
The right time to sell is when it suits you best.
Consider your current situation rather than the state of the market, to determine if selling is the right decision for you.
Have your tenants given notice, allowing you to spruce the property up and sell it vacant?
Would you benefit from reduced financial pressure of rates, insurance, and mortgage payments?
Maybe you want to reduce the mortgage on your own home?
Do you have a business opportunity you would like to pursue which necessitates selling your rental property?
Are there lifestyle reasons which make selling attractive? Maybe you want to travel the world with your kids while they are still young or have more freedom to enjoy your retirement.
All these factors are valid reasons to sell your investment property, and they are all opportunities that won't last forever.
Once you determine whether selling now (or in the near future) suits your needs, securing the best possible price, and therefore maximising your return, will depend far more on the salesperson you select to market your property than the particular month you choose to go on the market.
A proficient real estate salesperson can add 5 -10 % to the value of your property by helping you prepare and present it at its best. By attracting more buyers, coordinating competition and overcoming hurdles throughout the campaign.
That extra 5-10% can mean a huge increase to your personal equity - the amount you walk away with when you sell.
What's next?
You may have a number of other questions about the selling process.
- How much does it cost?
- What renovations add the most value?
- Can we sell it with tenants?
- What if the tenants want to buy it?
Call me today to book a no-obligation chat about your investment property. I can provide answers to the questions above and any others you might have.
