Now that the heat is starting to come out of the Sydney and Melbourne property markets, and indeed many other markets around the country, many investors are wondering if now is a good time to sell and profit.
With tougher lending conditions and loan repayments up significantly for many investors, you can see why some would be tempted to sell, however it’s important to keep in mind that not everyone in Australia (or even within the same city or suburb) are in the same marketplace, and there are a lot of variables worth considering.
First of all, you need to ask yourself if the investment property is working for you. Sometimes a property can become a burden particularly if it’s older and requires ongoing maintenance or is in need of major renovations.
Apart from the financial equation, you should also ask yourself if the property is just becoming too stressful and you would prefer to not have to have the extra worry in your like, or you would prefer to free up the cash to use for something else.
However, try not to act too quickly on emotion. Think about your situation logically and don’t make any rash decisions that you could potentially regret later. Even if you are making a small loss now, it could pay off later on.
When it comes to property, the longer you can hold onto it, the more profit you generally stand to make, with figures from CoreLogic’s Pain and Gain report for December 2015 showing that the average length of ownership for homes that made a gross profit was 10.1 years. Homes which sold for more than double their previous purchase price were owned for an average of 16.9 years, showing that time can be a rewarding factor when it comes to the property market.
But there’s no “one size fits all” answer when it comes to whether or not to sell and the best time to sell, and everybody’s situation are property goals are different.
The best advice we can offer is to talk to a trusted advisor that has the knowledge and experience you can rely upon. Have a good chat to them for some guidance, but just remember that the decision is yours and yours only. It doesn’t matter what advice anybody gives you, you are the only one affected by the eventual outcome so keep your best interests in mind.
However, when it comes to any kind of investment – the higher the risk, the higher the gain, and the higher the gain, the higher the risk.
We all have different levels of risk we are comfortable with so you need to ask what you are comfortable with and act accordingly.