Whether you have one investment property or several, you will get the best return from your investment if you keep a regular eye on the performance of the real estate market and the overall state of the economy. It also helps if you have clear goals and have already decided if you are in it for short-term capital gain, or are pursuing a long-term strategy to top up your retirement income.
Are Property Cycle Movements a Reliable Indicator?
Some investors follow the 7-year property cycle, selling at the top of the market, then waiting until prices fall before buying another property. This is not a foolproof method as the time frame varies by several years and from one city to another. The cycle can be much longer or shorter depending on market and economic conditions.
Current Market Information Best Guide
The most successful investors are those who understand the market in the areas where their properties are located, and who have up-to-date information about those areas. We service a large part of south-western Sydney and we know the supply and demand levels in these areas. Our knowledge of the market allows us to keep our investors fully informed about property and price movements.
Reasons for Selling Sometimes Personal
Our Prudential Real Estate property experts are always available to talk to investors keen to take advantage of movements in the market. What we find during these conversations is that people sometimes have personal reasons for selling that have nothing to do with the state of the market. If they are in financial difficulties, for example, they may need to sell even though it may not be the right time to get the best return.
High Demand and Low Supply – Classic Economics
Leaving aside personal reasons, logic tells us that the best time to sell your investment property is when there is high demand and low supply at that location. When this demand coincides with low interest rates and a stable domestic economy, buyers feel confident to enter the market in numbers. This demand pushes up prices.
Underperformance Another Reason
An investor may also decide to sell a property when it begins to underperform. As well as keeping tabs on the sales side of the equation, the canny investor also needs to keep an eye on rental returns. An investment asset ideally should grow at the same rate as its suburb over 7 to 10 years. If this is not happening, for whatever reason, it may be time to sell.
Regardless of the motivation you may have for selling your rental property, we are ready to help with market information, rental figures or any other information you need to make an informed decision.