Why hanging onto your investment property could cost you thousands

According to the duo, selling a property ultimately comes down to numbers, goals, and strategy.

“Selling a property is a strategic decision – not a reactive one,” Reshmi said.

The Kumars said that once the property has served its purpose and holding costs outweigh the potential for further gain, it’s time to move on.

“Investors can always replace the property with a better one that will propel them towards our goals later,” Reshmi said.

She said that some investors can become emotionally attached to their property, overlooking key holding and selling costs, which can lead to inaccurate calculations and overestimated returns.

“When cash flow is being impacted negatively and is affecting your lifestyle, and you don’t see a clear exit and selling is the only option, then it is better to sell and let go rather than holding on to it,” Reshmi said.

“This situation arises when people haven’t selected the property well during the buying process and haven’t allowed for life circumstances.”

The duo said that while there is no right or wrong time to sell a property, investors should consider factors such as property type, market cycles, buyer demographics, and tax implications before selling their assets.

“While there is this age-old held belief that spring is the best time to sell, it really depends on what type of property and what demographics you are aiming the sale at and also what the tempo of the market is at that time,” Victor said.

“Catching in ‘tax benefit seekers’ may be best in August/September; catching the ‘new year’s resolution’ buyers would be of course Jan/Feb, so really comes down to the property and the cycle in the area, and who your buyers are in that area, i.e. investors or owner-occupiers,” he said.

While each season brings its selling benefits, the Kumars said investors should still analyse the market conditions before selling their properties.

Victor said that most investors may have an inflated expectation of value, and sometimes they may even have undervalued their investment.

“When selling, often they may have pulled the trigger a bit too late and won't have the ability to achieve as high a price or sell as quickly as they would have in the last quarter,” Victor said.

The property experts advised investors to watch for signs of a strong seller’s market, such as high demand, tight rental supply, packed open houses, rapid sales, and properties exceeding their asking prices.

Additionally, the duo said that knowing who the buyers are is a crucial aspect of understanding the selling process.

“[Sellers] need to have specific items that the demographic favours in the area, for example, if prospective buyers are young families, they’ll prefer to have a bathtub. Investors might need to add one to get the most out of their property,” Reshmi said.

Similarly, they said the property needs to be appealing to ensure a smoother selling process.

“Remember people use sight and smell to make decisions, so make sure your home smells nice and there isn't unnecessary clutter or lawns overgrown,” Victor concluded.

Tags:

• Latest

Share