The 5 key reasons to sell an investment property

If you own an investment property in Neutral Bay and surrounding suburbs, you might be wondering whether you should hang onto it or sell it. This week, we look at 5 key reasons to sell your investment property, which will hopefully make the decision easier for you.

When you want to invest in something new

When you’ve had a certain investment property for some time, you might want to consider investing in something new that’s going to be more lucrative. Or, you might want to diversify your portfolio and selling your current property could help you to fund this.

For example, you might have come across an opportunity to invest in a different area that’s quickly rising in value and you want to take advantage of this.

Or perhaps, your current investment property is a three-bedroom house and you discover that it would be more lucrative to invest in a couple of units or apartments instead. Selling a renovated property in order to buy one that needs some work is another way to diversify.

When you want to free up funds to upsize your own home

While your investment property is giving you rental returns, it’s also an asset that you can sell to fund improvements that you want to make to your own home, or to buy a new home if your needs have changed.

If there’s enough equity in your current investment property, you may also choose to sell it to fund renovations rather than increasing debt, especially with current uncertainty around interest rates.

When you feel you’ve maximised an area’s gains

With any investment, it’s important to keep track of your returns and your profit to ensure that the money you’ve put into your investment is still providing adequate returns.

You also want to keep an eye on the current market to see whether properties in your area are still rising in value. If this is not the case, then it might be time to sell your current property and find another one in a growth area, either locally or further afield.

When it’s in good condition and will be straightforward to sell

If properties in the area are in high demand and your investment property is in good condition, it might be a good time to consider selling it. This can be a timely decision if you’re almost guaranteed a fast sale at a good price.

Right now, properties are being snapped up quickly and there’s a hungry list of buyers, including first-time buyers wanting to get out of the rental market, who are waiting in line. This usually means that you could expect to sell your property for a higher price and thus, get a much better return on your investment. Well-presented properties that people can imagine being their first home are always going to be in demand.

Then you can use the funds to invest in another property that’s in an up-and-coming growth area. This is a tried-and-tested strategy to keep in mind to grow your wealth.

When a tenant moves out

If you’ve had a long-term tenant in place and they decide to move out, this is a good time to evaluate the performance of your investment.

Or you might have just retired and feel that you want to make your life a little easier by simplifying your investments and freeing up capital to travel and enjoy life. While you might have been hesitant to do this while there are tenants in place, once they move out, the decision to sell becomes much easier.

Remember that while the property sits empty, it’s much easier to show it to prospective buyers, and to present it as a clean slate.

Do you have any questions about the Sydney market?

If you have an investment property and don’t know whether to hold onto it or sell it, feel free to give us a call. We can let you know what the Neutral Bay property market is doing and give you some useful advice.