28 Jul Is now a good time to sell?
It’s the question real estate agents get asked every day. The question has the presumption of market cycle timing and future direction. The market is strong now but the question is more about what will happen “tomorrow”. Of course no one knows for certain and we monitor market indicators closely to provide the most informed possible answer. It’s a critical question, but not in the way you might expect. For investment property the market cycle is a subordinate consideration to your personal situation and future plans. So, if you are wondering if it is a good time to sell… I suggest you ponder these questions first:
- How long have I owned the property? (avoid selling inside 5 years)
- How will I redeploy the proceeds from sale and what are those risks, costs & likely market direction?
- What is my total investment asset allocation balance?
- What is my likely net earning pattern for the next 10 years?
- Does my situation enable me to manage an active investment class like shares?
- Are there restructuring options ie. gearing or ownership including SMSF?
If you’re satisfied the answers to these questions still point you towards selling, then work with your agent to agree a plan to get the very best price, regardless of the market. Still, it’s nice to know the current market is very strong.
Oh there is one last thing… If the primary reason you’re selling is just to crystallise a profit, I suggest you don’t sell. Property is not the sort of asset class you trade. Unless you are supremely confident the market is going to drop by more than 8-10% (the cost of sale and repurchase) you’re better to keep owning the property.