With a lot of negativity in the media recently on home prices, some people might be thinking about selling their property.
My advice to most people, when asked if now is the time to sell, is that they should have a good look at the reasons behind why they might want or need to do that.
When you’re considering selling, the first factor to take a look at is what was your plan when you initially sat down and started thinking about investing in property in the first place. Were you looking to build a portfolio over a long period of time, or was this going to be a one-off investment and see how things go in the future? If so, what has changed in the last few months?
It can be easy to get caught up in media speculation, but the reality is that most property in Australia is still worth far more than what it was prior to the pandemic. If nothing has changed and the interest repayments remain within your budget, you should probably remain true to your original plan.
Circumstances do change at times and this can be due to totally unforeseen events, especially since many people have families and children to consider, but outside of these types of things, working towards your longer-term financial goals is usually a good idea, as hindsight often reminds us.
The second factor to consider for most expats, is that you are buying an investment property. It’s not somewhere that you’re going to be living in for the short to medium term and it can get very expensive if you want to start trading in and out of these assets. We all know that property is a lumpy asset and transaction costs in many countries are very high, with Australia being no exception.
More often than not, by the time you get your tenants out, get the property ready for sale market your property and then ultimately pay agent commissions, you are usually going to incur substantial expenses. That is before any tax implications, which may be even more important to your overall financial outcome.
For that reason alone, it’s well worth trying to hold onto your property as long as you possibly can.
The reality for most property owners is that they would likely have seen the value of their property portfolio increase substantially over the past few years. While some people might be thinking about selling, given that you have had a strong uplift in your equity means that you probably have more options available to you than you might think.
Don’t get engulfed by the sensationalist media headlines and always try to think about what you’re trying to achieve over the long term. Unless you have a compelling reason to sell your investment property, and a better place to invest the proceeds currently, time will probably show you that making transactions just for the sake of “doing something”, may not be a prudent course of action.
I find It is always worth remembering how many times I hear friends saying, “ I had a place over there and I wish I had kept it till now”