5 questions to ask yourself before selling an investment property.

 

If you are wondering whether now is a good time to sell your investment property, make sure you ask yourself the following questions.

 

1. Why am I selling?

According to Nathan, a lot of people invest in property without having a sound strategy in place.

 

They buy properties willy nilly and then sit there speculating about the markets they have bought into.

 

After watching news and current affairs reports about the property market tanking, they become fearful and think they should sell.

 

If you have bought at the peak and your property is not worth what you paid for, it could be a good idea to offload it.

 

However, it is important to question why you are selling the property and if it is actually a good time to do so.

 

2. What am I going to do with the proceeds and my new serviceability?

Once you sell the property, how will you use the proceeds to improve your net worth position?

 

Nathan says he has seen people sell off properties only to waste the money they make by going on a holiday.

 

In this changing market, money is losing value and income producing assets are becoming more valuable as inflation increases its rate.

 

If you are selling an asset, it is a good idea to reinvest the proceeds in another asset that is in line with your strategy and goals.

 

3. If I sell, will I be able to buy more assets?

Don’t just assume you will be able to buy a new property once you sell off the old one. Thanks to liquidity drying up, it isn’t that easy to get a loan anymore.

 

You may not be able to rebuild your portfolio to the same position if you sell off all your current properties.

 

4. Is the cost of selling worth it?

The in and out costs of a property are expensive. There’s the tax implications such as CGT and stamp duty, and then there are the agent’s fees and other transaction costs.

 

If these costs are going to eat into your gains and stop you from investing in another good property, it may be better to hold onto your current property and use your equity to invest further.

 

5. How will selling affect my cashflow position?

If you sell your property, will your cashflow position be better or worse? How will this affect your bottom line and how will you improve your passive income?

 

Selling is just as important as buying. A sound strategy is essential to ensure you don’t make any costly mistakes.

 

You need to have a good understanding of why you want to sell and whether or not selling will help you improve your net worth position and passive income.

 

Most importantly, if you do decide to sell, make sure you don’t throw away your profit. Reinvest it in something that will help you achieve your financial goals and set your family up for the future.

 

Are you thinking of selling? Please share your experiences in the comments section below.

 

Help! Should I Sell It Or Keep It?