Whether you should sell or keep property is a matter of timing, but there are many other factors to consider.
Are you looking to pay off debt? Is your tenants’ lease about to run out? Are there other life issues at play, or are you feeling ready for a change?
Whatever your reasons, it’s not easy to decide if it’s the right time to sell your rental.
The market will always fluctuate, making it impossible to predict the next boom. Nobody wants to sell their rental to find out they missed an 8% growth rate for the year.
We’ve got some advice to help you decide whether it’s time to sell or keep your rental investment property.
4 Signs it’s the right time to sell your investment property
The average time for holding onto a property is 7-10 years, but this isn’t a rule.
Here’s what to consider when you feel it’s time to sell your investment property:
- You’re holding property in a stagnant or declining property market
- You’ve recently retired or started to work part-time
- Your property is negatively geared but not growing in value
- There are other opportunities for investment
THE MARKET HAS LITTLE TO NO POTENTIAL FOR FUTURE GROWTH.
If the area you’ve invested in is at a long-term property market standstill, you may want to sell before it declines further.
Does your area have higher vacancy rates? This will tell you if the population in the area or suburb is stagnant.
YOU’VE RECENTLY RETIRED OR HAVE CHANGED TO WORKING PART-TIME
This phase of your life may be the right time to retrieve the benefits of the property you’ve been holding.
This applies if your rental is negatively geared, where expenses are hard to keep up with. In this case, you’ll be better off selling.
This will also depend on your financial goals. If you were holding a positively geared rental and prepared to live off the rental income, that’s fine. But a plan for when it’s time to sell the property will help you later.
This change in circumstance may also be an excellent opportunity for you to sell. With less or no taxable income, you aren’t required to pay as much in Capital Gains Tax (CGT).
CGT is the government’s fee on the capital gains, or profit, made from your investment property. If you sell while not working full-time, you can keep more of what you’ve recouped off the property sale.
YOUR INVESTMENT PROPERTY ISN’T PERFORMING WELL AND IS NEGATIVELY GEARED
Even if you’ve researched before investing in a property, they often don’t perform as well as expected. If your property depreciates and you’re losing money, it’s probably time to consider selling, particularly if the market looks stable.
YOU’VE SPOTTED BETTER INVESTMENT OPPORTUNITIES
Investing in property is about increasing capital gains, and if you have a chance to do that, that’s your chance to seize the opportunity.
Just do your research first. Remember that many costs are associated with buying and selling a property, so make sure the flip will is worth it.
Check out the ATO’s advice on tax deductions when selling your rental property.
3 Cases when you should hold on to the rental property
Knowing when to hold property is a skill and a very important one.
By not selling your investment property, you may reap significant benefits in the long term. Here’s how you can tell that you should keep your property:
YOU BOUGHT THE PROPERTY QUITE RECENTLY
If you’ve owned your investment for less than five years, it may cost you more to sell than it’s worth. The costs of buying a property are vast, just like trading.
Selling can be an expensive exercise. To avoid a loss, holding onto your property until you can secure some capital gains is recommended.
ANZ’s comprehensive list and price breakdown for selling a property can be found here.
YOUR PROPERTY IS IN A GOOD LOCATION AND MAKING YOU MONEY
Sometimes a lull in the market scares investors into thinking they need to sell. If your property location is a growing area, you’ll find it easy to get tenants, and its value will have increased since you purchased. So, there’s no need to panic.
Ultimately, keep your risk to a minimum and take the safe route for more financial stability.
If you’ve got quality tenants, holding onto them is best. It’s not just about short-term gains; your property will increase in value long term.
YOUR CURRENT PROPERTY IS BORING YOU
If you find a better investment opportunity, then grab it.
Avoid just looking for novelty. Too often, property investors let go of a perfect property because they want something exciting and new.
Conversely, it’s a good sign if your rental is boring you. This means that things are stable and ticking over nicely. So, question whether you’re shaking it up just because.
Real Estate Experts and Newsletters Should Follow
These days any property expert can publish their real estate advice online.
Trawling through blogs and social media accounts to find the most relevant real estate blog can take precious time, but here is a list of Australia’s favourite property investing experts and property research newsletters. These blogs are perfect for those brand new to the property investing game or seasoned professionals.
5 Property experts to follow
Here are the property experts and blogs in Australia to follow:
Michael Yardney’s Property Update blog has been going strong since 2001. It was the world’s most popular property blog on Feedspot for four years.
This blog covers many topics for novice and seasoned investors, so it’s a great all rounder to frequent.
Michael has also written and published nine books, runs a property investment podcast, and writes columns for Smart Company and the NZ Property Investor Magazine.
After Helen and her partner, Ed, retired with an impressive property portfolio, they decided to share their knowledge with others via the Real Wealth Australia podcast.
If you’ve thought about investing in property but aren’t sure where to start, Helen’s Property Portfolio Formula Course has some great advice.
Doron Peleg has over twenty years of property management experience.
His company, Riskwise Property Research, is a helpful resource for developing risk assessments for potential investments.
You can follow Doron on Linkedin. Here he shares many data-centric insights that experienced investors may find useful.
Margaret Lomas is well-known in the property investment world and is a best-selling author, TV host, and founder of Destiny Financial Solutions.
Her must-read book, “20 Must Ask Questions for Every Property Investor,” is a valuable resource for those new to property investment.
Dymphna Boholt’s multi-million dollar global property portfolio is a testament to her expertise.
She runs several programmes targeting beginner investors, and her I Love Real Estate blog is a fabulous resource for keeping on top of current Australian property news.
Property research newsletters you should be getting in your inbox
Newsletters are another way to keep on top of your property investment game.
Here are some of our favourites:
Make SQM your go-to if looking for detailed property data.
They provide a broad range of paid premium (and free) data, including auction results, demographics, rental yields, and sold records.
They also have a custom data request option for specific questions about your property.
SQM’s free weekly newsletter includes updates on current property data and market analysis from real estate expert Louis Christoper.
It’s a good idea to sign up for a CoreLogic subscription if you’re after strong insights. From a property’s estimated yield and cash flow to current investment trends, it provides essential data to help you make the best decisions.
CoreLogic’s data packs require a premium membership fee, and options range from one week to 12 months of membership.
A goldmine for any property investment newbies, their packs include a comprehensive list of pros and cons for your property.
The free CoreLogic weekly newsletter, Property Pulse, is also packed with property news and the latest residential property research.
AUSTRALIAN PROPERTY INVESTOR
While providing access to reputable data and analytics, Australian Property Investor covers more news, case studies, and interviews with industry experts than any other. Their weekly newsletter is excellent for everything happening in the Australian property landscape.
API’s free membership also provides access to great tools, including tax and finance calculators, workshops, invites to events, training programs, and property expos.
But are real estate ‘experts’ trustworthy?
The short answer is yes and no. Those well-known in their fields will have a proven track record. However, experts take a general view and cannot give you the necessary research level according to your specific circumstances, for instance, in particular suburbs or your mix of specific property features and buying history.
Following real estate experts are an excellent way to stay on top of recent news and trends, but they must be supplemented with proper research.
Always supplement expert advice with your own research. Never follow online opinions to a tee.
The internet is teeming with real estate experts, which can be a blessing or a curse! It’s often not easy to know where to start. But, with this list, you’ll find great tips and advice for maximising the returns of your investment property.
Podcasts for property investors
We’re all leading busier lives.
It doesn’t matter if you’re a long-term property investor, new to the game or somewhere in between; keeping up to speed with the property market can lead to smart investments. It’s also time-consuming.
Property podcasts are a great way to make the most of your spare time. Here are some popular property investments podcasts to save you looking around:
Director of Smart Property Investment Phillip Tarrant hosts a show in the property investment space. Guests include demographers and politicians to discuss a new topic each week.
Ryan McLean’s regular podcast is a brief wrap on many property-related topics, including finance, renovations, where to invest, and more. Released daily, this bite-sized podcast is a great way to get your daily dose of property inspiration.
The weekly Real Estate Talk podcast features speakers discussing property investment strategies, news and tips.
The Quit the 9-to-5 podcast is for those looking to make a career out of property investment. CEO of the Buyers Agent Institute, Ben Handler chats with guests who have made a living this