With the cost of property ownership rising, is now the time to sell and cash up? We look at reasons to exit the market, and reasons to hold on.
The last few years have been a rollercoaster for property owners in Melbourne. Till very recently, it was a seller’s market, but that trend has changed. In parallel, land tax and interest rates have increased impacting the holding cost for a rental property. With the return-on-investment diminishing, in some cases becoming negative, many investors have been asking us for advice on whether this is the time to sell and cash up.
The thing to remember however is that when you buy an investment property it is vital to have a buffer. Investing in property is not a short-term investment. You are in it for the long-haul and you need to go with the market ebbs and flows, and the buffer keeps you safe when the going is slow. You can’t expect to buy a property and pay the minimum deposit because that’s when you get caught out when interest rates go up.
It is also important to buy right. The right property, bought at the right price will continue to grow in value, perhaps flattening during an economic slowdown. With rents on the rise, these properties, owing to their location are also the ones likely to be earning higher yields, easing the burden of increased ownership costs.
You also need to take into account your personal circumstances and long-term financial goals. Does your rental fit into these? Is it moving you in the right direction? If so, you should keep it. And if not, this could be a great time to rethink your investments. At Ryan Property Specialists, we can help you analyse your rental property affordability, portfolio performance and potential returns to ensure your investment is tracking towards your goals.
If you are considering selling, the sale market isn’t as strong as it has been in the past however if you’re buying and selling in the same market you’re on an even deal. Before you sell though, you need to weigh up if you hold on to the property, is it going to continue to grow in value or is your money better spent elsewhere.
Weighing up costs is important as sometimes holding a property is going to put strain on the family budget. It may be better off of investing in other areas that may not require as much investment as property.
Selling your investment property should be a strategic move that considers whether you can achieve a better return elsewhere. To assess that fully, you need to clear on the returns of the property investment itself. If you need help to understand and realise the full potential of your investment property, connect with us for a free assessment today on 9899 6099.
Kym Ryan
Director – Ryan Property Specialists
