How to minimise investment property losses when you sell

We’re noticing that more property investors are now contemplating selling their investment properties. There appear to be many reasons, including increased interest rates and cost of living pressures. Plus, some investors who held onto their properties due to the downturn a couple of years ago are now deciding that now is the time to sell while supply is still relatively low and demand is high.

If you want to sell your investment property, it goes without saying you’ll want to minimise any losses as much as possible. Remember that a short, sharp sales campaign can make sense when you’re already losing money on your vacant property, unless you’ve decided to list your property with tenants still in place.

Here are some things you can do to minimise any losses.

Book your trades early

If there are repairs that need to be carried out to get the property market-ready, book the relevant trades as early as you can to avoid delays. Similarly, only spruce up the property where it makes the most sense and avoid over-capitalising on any major renovations that you might have considered.

Don’t forget about the exterior of the property and the street appeal because this can have a major impact on the number of people who come to view the property. We’re always happy to give you advice on want is worth spending money on and what you can leave as is.

Consider engaging a stylist

Having your property professionally styled can make all the difference when you want a quick sale. A house will sell much faster if potential buyers can see themselves living in it rather than looking at a lot of empty rooms.

If you don’t want to go to the extent of hiring furniture and other items, consider using virtual furniture just for the photos. Once again, this shows potential buyers what can be done with the interiors and makes visualising how the rooms will look when furnished much easier.

Obtain all the relevant strata information

If your property is a unit in a strata complex, make sure that you gather all the relevant information that buyers will be seeking such as the strata fees, maintenance plans and annual general meeting minutes. This means that you can provide this information to interested buyers quickly and avoid any delays.

Limit the amount of capital gains tax you have to pay

As you would be aware, you’ll have to pay capital gains tax when you sell your investment property. If you purchased the property after the 20th of September 1985, you’ll be required to pay tax on the entire capital gain that the property has achieved.

To help reduce the amount of capital gains tax you have to pay, make sure that you have all the relevant paperwork and costs tabled for when you purchased the property initially. This includes conveyancing costs, title search fees, valuation fees and the stamp duty that you paid. All these initial expenses will be taken into account when evaluating the amount of CGT you have to pay.

Similarly, any expenses you incurred to make the property rental-ready before tenants moved in can also be included as a deduction when calculating CGT as can the expenses you’re going to incur when you sell the property.

When to sell?

Now is a great time to sell your investment property. Spring is about to start which means that many sellers are taking advantage of the relatively low number of listings and high demand. But it’s always worth getting in early.

Talk to us about preparing your home and what you need to do to get it market-ready. More importantly, you’ll want to know what you don’t need to do so that you’re not wasting valuable time and money that’s not necessary for a successful sale.

Thinking of selling? Talk to us today

If you want to sell your investment property, getting it to market as soon as you can will help you beat the influx of spring sellers, so give us a call at your earliest convenience.