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Property investor Kevin Sum decided to sell two of his nine investment properties last year in order to find a better use of his money and ultimately create greater wealth in a shorter amount of time.
After his assets in Orange saw good growth since he bought them, the market stabilised, opening more opportunities to explore other investment strategies.and
According to Kevin: “I thought, ‘Should I keep it and wait for the slow, organic growth or should I offload it and find something which has a better growth?’ "
“For example, with the Granville one, I might be able to buy two in Brisbane … [which] might go up by $150,000 in total. [If I keep the property] ... I only predict [growth worth] $50,000.
“So, why not offload Granville … and [invest in] Brisbane or wherever, which might potentially give me more than $50,000?” he added.
Aside from the greater utility of his money, he will also achieve greater diversification for his portfolio and, therefore, manage his risk profile well.
While it took some time to sell his properties, Kevin found the whole process “relatively okay”, especially with the help of real estate agents. Much like finding agents to help you buy assets, seeking professionals to help you sell requires thorough research and building good relationships.
Kevin ended up choosing the agent who has already managed one of his properties for him.
The property investor said: “I was basically just going through sold listings on RealEstate.com and I was just seeing who's getting good results, who's always selling properties or always have properties under contract, and ... what the selling price was.”
Aside from the agent’s reputation, property investors must also pay attention to their services’ fees. More often than not, you can haggle on commission with the agent when selling properties. However, it is also important to remember that, in most cases, you get what you pay for.
Kevin shared: “The commission they offered was reasonable so I didn't bother [haggling] … I was thinking … I could always interview 10 agents and, basically, just get them to outbid each other, but what's the point if it makes them lose [the] incentive to get the best price for me?”
If you choose to haggle on commission, you have to make sure that you stay reasonable so agents don’t lose the drive to sell your property.
According to Smart Property Investment’s Phil Tarrant: “It's a fine line and a lot of people make the mistake of choosing the agent that has the cheapest commission because they feel as though they'll pay less money.”
“But if you pay a little bit more commission … [and] you get 5 per cent more on your sales price, you're a lot better off in the game,” he added.
As hard as it seems to add assets in your portfolio and maintain them for some time, selling properties also entails unique challenges, which is why it’s as important to engage trustworthy professionals as you go along your journey.
Tune in to Kevin Sum’s episode on The Smart Property Investment Show to know more about the boxes your property should be ticking and the opportunities you should be jumping on.