Brisbane – various articles of interest 12-6-2018

While it’s important that you hold an investment property for the long term to maximise your profits, there will come a time when it makes sense to sell.

And when it comes to selling, timing is everything. Ideally, you should be able to hold on to your investment property until such a time when it’s most conducive to sell.

That time is when:

  • The market is approaching its peak in terms of price growth
  • You want to consolidate your portfolio
  • The property is underperforming and you want to move your capital to better investments
  • You’re leaving your job and need the cash flow to fund your lifestyle
  • You’re facing financial difficulty and possible bankruptcy

When you’ve held your investment property for the past five years and haven’t seen significant capital growth, you’re essentially holding a dud property. In this case, you have to dump it. There are plenty of other markets where properties are growing dramatically.

You should also consider selling when the long-term demand in your market is declining or showing signs of slowing demand.

For example, if you bought in a regional area that’s main industry is mining, where the main employment is about to scale back on the workforce, you have to move fast and sell before the other properties hit the market.

The bottom line is if you do have to sell, the best time to do it is when people are willing to pay more than what your property is worth. Don’t rush to sell, but at the same time don’t hold out for too long. If you do, you may miss out and prices could fall before you’re able to sell.

Whatever your reasons, your aim should be to maximise your selling price. This means you should try and avoid finding yourself in a situation where you’re forced to sell.

Before you sell

Before you stick a for sale sign in the front yard, it’s important to be clear about what you want to achieve as a result of selling.

Here are a few suggested steps for you to consider:

  1. Go over the pros and cons of selling your investment property. Selling is expensive so be clear about why you’re doing it.
  2. Get a valuation to get an idea of how much is your investment property is worth.
  3. Speak to your accountant regarding the capital gains tax implications of selling your property. Since this is an investment property, you will get a 50% discount on the capital gains tax if you have held this property for more than 12 months.
  4. Speak to a property analyst or expert to gauge where your market is at now in the property cycle. You can also do the research on your own by looking at the property values over the past 3-5 years and see how they’ve performed.
Plan your exit before you buy the property

Before you decide to buy a particular property, you need to have a strategy in place on how you exit it when the time comes or when the worst case happens.

For example, be clear about the triggers that would lead you to sell the property. Watch your cash flow like a hawk and keep an eye on your market.

Watch for any signs of changing market fundamentals and act decisively. Don’t let greed rule your head.

Put in place risk mitigation strategies such as hefty buffer in case you lose your job.

Before buying any property, always ask yourself:

  • Can I sell this in a hurry without losing money?
  • Who would buy it off me?

You should feel confident that if the worst case happens, you’re able to sell quickly without any losses.

Most suburbs in Greater Brisbane have a median unit value below $500,000.  Even within the CBD and surrounds median unit values generally sit below $500,000 offering a much more affordable alternative, particularly in the inner city to houses.

Suburbs closest to a capital city GPO with a
median unit value of less than $500,000

2018-05-28-pulseimg1

Rocklea is the closest suburb to the city with a median house value below $500,000 and it is the only suburb below that price point within 10km of the CBD.  Once you move more than 10km from the CBD there are many options under $500,000.

Suburbs closest to a capital city GPO with a
median house value of less than $500,000

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Investment mistake #1. Making a strategy fit an area

Having a strategy is important if you want to succeed as an investor. However, rigidly sticking with the strategy rather than focusing on the result can have costly consequences.

For example, if you’re pursuing a renovate for profit strategy and are looking to invest in Moreton Bay in Queensland, you’re likely to be targeting 30 years old unrenovated homes. But this type of property isn’t what the demographics of that area want. These people have dual income, high-paying jobs. They want a 4-bedroom, 2-bathroom, double lockup garage house. They want a relatively brand new or up to five-years-old property, not a renovated 30 years old property.

Therefore, it’s crucial to really understand the demographics of an area and what’s in demand to ensure you’re buying the right product.

Investment mistake #2. Becoming emotionally attached to an area or property type

It happens to many of us. You come across a property expert extolling the big profit potential of an area and we jump onto the bandwagon.

For example, if an expert recommends Moreton Bay and suggests looking at units or townhouses, you’d probably want to target them too.

So you go into the area having already developed a personal preference towards townhouse or units because you’ve been told of its potential.

But based on a research on the demographics of the area, it shows that a 2-bedroom unit will be a death sentence. The demographics aren’t keen on this type of property. They want relatively new, 4-bedroom, 2-bathroom, double lock up garage.

To ensure you avoid this mistake, look at what’s in demand in the area and understand your potential buyers and renters, not blindly following an expert’s recommendation.

Investment mistake #3. Relying on partial advice

It’s human nature. When it comes down to choosing between paying more for something better and getting a cheaper but lesser version, most of us will opt for the latter.

Although we know instinctively that you get what you pay for, we’re still attracted to the short-term “savings”.

This is especially true with property investment advice.

Unfortunately, trying to save money by relying on cheaper but incomplete advice could cost you more over the long term.

That’s because you end up filling the gaps with your personal preferences, emotions or skills and you’ll get it completely wrong.

If you have to rely on a report or recommendation, make sure that it gives you all the information you need to make an informed investment decision and leave you filling in the blanks.

Investment mistake #4. Following the herd/swarm

There might be safety in numbers, but when it comes to investing in property, more investors in an area doesn’t always spell profits.

Granted that there are benefits of banding together such as the ability to buy at a lower price, there’s equally a huge risk with this strategy.

Joining the herd creates a lot of competition in that market. A lot of investors in an area means higher competition for renters and for buyers when it’s time to sell.

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About ljgrealestate 据联大

Removing the Hassle from Sales and Rentals across South East Queensland. Aim to Empower other like minded Property Investors. L J Gilland Real Estate is a prestigious boutique agency specializing in Property Investment Management Services and the Sales of Investment Properties with tenants in place. Comprised of a top performing group of handpicked specialists, our Agents proudly serve Property Investors in Queensland. Since 1996 our Agency has demonstrated a genuine enjoyment of working with people, developing long-term relationships and delivering on the promise of great service. Carlos and Linda Debello offer property investor's the confidence to sell and lease in any market. We provide comprehensive market appraisals, exclusive multimedia marketing campaigns, and knowledgeable, highly personalized counsel on all aspects of real estate. Our Property Management Team is equally considerate, offering investors with in-depth advise, well-researched rental valuations, and highly professional rental management services. http://goanimate.com/movie/0M4bvcZzgIbI?utm_source=linkshare&uid=0u6RGtWsmlVc Carlos’ direct mobiles are 0400 833 800 & 0413560808. Linda’s mobiles are 0409995578 & 0414978700 (prefer email contact for Linda). Office 07 3263 6085. http://www.ljgrealestate.com.au http://www.yellowpages.com.au/qld/aspley/lj-gilland-real-estate-pty-ltd-14091356-listing.html http://au.linkedin.com/in/lindajanedebello http://twitter.com/GillandDebello http://www.facebook.com/pages/ljgrealestate
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