Time to sell your investment property ?

Property investors are typically in the market for the long-term. But sometimes market conditions make it a great time to cash in and sell your investment property.

So is now the perfect time to sell your investment property? Here are four good reasons why it might be.

It’s a hot market 

Capital city markets like Sydney and Melbourne are buoyant right now, so you can sell more easily, and often sell for a premium. Both cities - but particularly Sydney - are desperate for new housing stock and there are way more buyers than properties for sale. 

This kind of hot market is particularly good for selling an underperforming property, an unusual property, or a property with an obvious defect. However, it could be the ideal time to sell any property.

After all, many commentators believe we may not see this kind of market again and that it won’t be here for too much longer. So, depending on your situation, now could be a great time to release your equity and cash in on recent capital growth. 

Rents are flat

In many parts of Australia, rents haven’t kept pace with the soaring sales market. In fact, the divide between house prices and rental yield has rarely been more stark. Again, this is particularly true for Sydney or Melbourne. 

So while many property investors have recently enjoyed strong capital gains they haven’t necessarily seen the same rise in rents. So if you’re looking for income rather than capital gain, now could be a very good time to sell your investment property and park your money in an investment that generates a better return.

Speculation over changes to negative gearing

While nothing has changed - yet - there has been a lot of talk, rumour and speculation about potential changes to the regulations around negative gearing.

The federal opposition recently called for a review of negative gearing rules, while the RBA has suggested that negative gearing should be looked at as part of a series of changes to tax incentives that encourage asset accumulation. 

Either way, any changes may have a negative effect on the price of some investment properties.

It’s the right time for you 

Ideally, any investment is about balancing both growth and income. And property investments are no different - a property needs to be doing its job and working hard for you. So if, after close examination, you don’t think your investment property is pulling its weight - or if it’s not the right kind of investment for you right now - it could be time to sell and choose something else.

And finally…

When considering whether to sell your investment property, you should also be mindful of the costs involved. So bear in mind that if you do decide to sell, you could be up for:

•      Loss of rental income

•      Capital gains tax

•      Transaction costs

•      Legal fees

•      Agent fees and commission.

So, do your sums and make an informed decision, including asking real estate agents what your property is likely to sell for.

Agent Select is a free and independent service that helps consumers select the best performing real estate agent, and negotiate the best terms to sell their property, anywhere in Australia. Agent Select’s three step process provides you with a property report, compares sales proposals from three local agents in a customised Agent Comparison Report, and gives you complete freedom to appoint your chosen agent to sell your property with confidence. Find out more at AgentSelect.com.au or call 1800 243 687.