The common wisdom is to buy and never sell, and make the most of the fact that property values generally trend upwards over time. Meaning the longer you hold onto a property, the more you stand to gain.
But life tends to throw a lot of curve balls at us, and sometimes you need access to extra funds, or you just don’t see much point in holding onto a property that isn’t going up in value any time soon.
Here are some questions worth asking before you make the move to sell your investment property:
Is the money going to be more useful somewhere else?
If the property’s value is stagnating, or the rental yield is plummeting, you’ll be asking yourself if your money will be better parked somewhere else.
It’s always worth considering other opportunities available to you, and if your investment isn’t performing well then it might be worth cutting your losses and looking to make a better investment elsewhere.
Don’t forget to factor in the costs of selling up though; you don’t want to make a habit of selling and buying somewhere new every time your investment isn’t performing as planned.
Could you use the property’s equity instead?
If you’re looking to free up funds for another investment, you might be able to do this by gaining access to your property’s equity.
By using your equity instead of selling you will save on the costs associated with selling and you will be able to keep your property and continue to profit from its returns.
Are you earning an income from the property?
Are you profiting from your property after you consider holding costs and all associated fees? If so you need to seriously consider whether or not it’s worth losing this stream of income and if you can replace it when the property is sold.
Is it good or bad market timing?
Timing the market is always important. Ideally you will buy when the property market is at the bottom of its cycle, and sell when it’s at the top.
It can be hard to gauge what point of the cycle the market is currently in, but if prices have hit their peak and don’t look to be going higher any time soon, it could be a good time to look into selling.
Is the property causing more stress than it’s worth?
If the property is costing you money, its value is diminishing, and prices look to be going nowhere fast, you need to ask if it’s worth holding onto the property.
Don’t hold onto a property if you know it was a bad decision and you’re only going to lose more money in the long run by keeping it. It’s better to get out, learn from your mistakes and use the funds towards a more suitable investment.
There are a lot more questions you’ll need to ask yourself, before deciding if selling is the best option for you. Everyone’s circumstances are different, but if you’d like to discuss your investment property, or property in general, get in contact with the team at Arbee Real Estate.