by Vivi Octaviani
Are you finding it hard to keep up with property maintenance, difficult tenants, trying to pay off debt or are you simply ready for a change? Whatever your reason might be, it is difficult to decide if you should let go of your investment property and whether it is the right time to sell. The market is always rapidly changing, making it impossible to know if it is the best time to put your property on the market. However, here are some things that will help you determine if selling is your next best move.
Is your investment property sitting in a stagnant or declining market?
Don’t be afraid to acknowledge the declining market situation in your area. The average length to own an investment property is 7-10 years, so if you are already in that time frame, you are at the right time to sell before it declines further. Pay attention if the vacancy rate in the area is getting higher, this means that the suburb is stagnant.
Does the cost outweigh your income?
Having an investment property should give you a fresh breeze of passive income and build your wealth, but if this is not happening after a few years, you should act fast to put your investment property on the market. A few factors can cause this situation, for example, the tenant not paying the agreed rent or underestimating the maintenance and repairs to be undertaken or you simply purchased a property that is too expensive compared to the rental income. A great, qualified property agent should be able to notify you of the potential downfall and advise a possible solution that is more suitable to your financial goal.
Have bad experiences being a landlord hit you?
If you feel like the property investment is not your best gig, don’t let it get you down. A bad tenant can completely ruin your experience being a landlord. If your relationship with the tenant in question has reached its lowest point, it wouldn’t be as simple as asking them to move out. You will need to adhere to the relevant Victorian legislation and you should work with an experienced qualified agent to resolve it, and yet it can still get worse when the tenant refuses to move out. This could be traumatic for you and will lead to your decision to sell the property.
The good news is that you can always reinvest again! Do more research with your trusted real estate agent to find a better area to have your next investment property, with a better rental market and prospective tenants.
Do you need the cash for something?
If you do, then it is as simple as starting to plan your selling journey.
Decided to sell? But wait, don’t rush!
If you’ve decided that you are ready to let go of your investment property, remember these things:
- Gather several opinions on the property’s value. Get more than two appraisals from reputable real estate agencies. You want the best price for your property, yet realistic.
- Choosing the right agent. Be sure that they are reliable in communication and open with all fees, advertising strategies and the amount you could sell your property for.
- Also, do your research about the tax associated with buying and selling a property. Check with your tax accountant about tax deductions when selling your investment property.
- Be informed about the low vacancy and interest rates as the potential buyer will have more confidence in buying a good long-term investment. Choosing a strategic time when the market is most favourable will help you get the best price for your property.
Although there are unfortunate times when an investment property doesn’t perform the way it should, investing in a property is still one of the most popular methods to generate long-term wealth. Don’t be afraid to sell it if it is the best option for your current situation, an honest and reliable real estate agent should be able to guide you through the process now and for future reinvestment.