When is the Right Time to Sell Your Investment Property?

At Investors Edge, we work primarily with investment property in Perth. Our property managers and Free Sale Appraisal about the Perth real estate market.

One of the biggest issues facing property investors is learning when to hold on to a property and when to sell. We found that there are basically two kinds of investors: long term and short term. We believe that for most people, long-term investing is the most profitable but it is possible for short-term investors to make money, too–if they can time their purchase and sale with a bit of smarts and bit of luck.

Short-term Investors

Short-term investors like to “flip” properties, either for short-term profits or to “step up” into larger investments. Short-term investors have to be very careful when they sell their properties because there are too many factors that can decrease their overall return.

There are a lot of costs associated with both buying and selling properties. Those come directly out of your profit. Obviously, the more years you keep a property, the less these charges have an opportunity to eat into your profits.

Short-term investors are also more subject to market fluctuations. Short-term investors and “property flippers” around the globe were impacted by the Global Financial Crisis (GFC). When the bubble burst, a lot of people were stuck in properties that they had bought for the sole purpose of flipping. In many places, “short-term” investors are still stuck “upside down” in pre-GFC mortgages.

Long-term Investors

There is only one way to say this. Almost everyone who has ever held on to a property for longer than 20 years has made money. While short-term investment can be risky, long-term investment properties are still one of the safest ways to invest money.

Inflation varies from year to year–but it is always there. Consequently, by the 10th or 15th year of a mortgage, the monthly payment becomes a huge bargain compared to that of a new mortgage. Meanwhile, the owners can collect rents commensurate with the market.

When do I sell?

The best time to sell a property is when the suburb is in a sellers market, such as most Perth suburbs are experiencing at present. That way you have maximum buyer demand and are far more likely to achieve a premium price. The most important thing to consider is your individual situation, there is no fixed answer that fits everyone. Call 1300 472 427 for an individual, customised solution based on your current financial situation and property goals.