When Should You Sell Your Investment Property
Today I want to talk about an important part of your property investing strategy… deciding when to sell! So…
When should you sell your investment property?
The short answer: never!
Property investors who frequently sell their properties are lacking in good strategy. Don’t be like that. It will cost you money and cause you a lot more trouble.
Why Do People Sell?
Investors sell their properties because they’re trying to gain access to the money. They think they need to sell a property to do this because they don’t understand how property works and how the finance works.
How to Get Money from your Investment Properties
The goal of your properties is to generate income, but not by selling them. If you sell your property, it won’t be able to make you another dollar. There are two ways to get money from your property without selling it.
If you hold onto your property, the rents will go up over the years to create surplus income, or spare money that you can use and spend. That is the first way.
The second way to get money from your property is to take it from the equity. Over time, your mortgage on the property will stay the same (assuming your loan is interest-only), while the value of your property will go up. This creates available equity which you can then use to purchase your next property without using any of your cash.
Don’t Kill the Goose
The wealthy have been doing this for years. When you sell, you kill the goose that lays the golden eggs. You might have a feast that day on that lump sum, but that property will never make you any more money again. People who don’t understand this concept are the ones who sell their properties.
Maybe you’ve been there yourself. You have owned properties in the past and sold them. Think about how much those properties are worth now… do you regret that decision?
Never ever sell.
The Cost of Selling
The other thing you have to remember is that selling properties will cost you. When you sell an investment property, you have to pay capital gains tax, which really eats into your earnings. In addition, there are other costs associated with selling, like agent fees.
Just Don’t Do It
If you’re on the verge of selling a property, stop. Please get in touch and have a chat with me first. I’ll book you in for a strategy session so we can talk about if that’s a good option right now or if you’re about to sabotage your best chances of making money. Don’t chop the head off your golden goose!
Happy property investing,
Daimien J Patterson