When & Why Should You Sell
Before deciding whether to sell your investment property, you should consider your finances and housing market forecasts.
Before deciding whether to sell your investment property, you should consider your finances and housing market forecasts.
When deciding whether to sell your investment property, it’s important to consider several factors, including your finances and housing market forecasts.
If you are under pressure to close a sale in order to free up money, your speed to close the deal will be a significant factor. Understanding your financial picture can help inform your decision.
Taking time to understand the numbers involved in a transaction could save you from making a bad deal:
By looking at average house prices in your area, you can get a rough idea of the price range for houses like yours.
It’s advisable to check the rate at which properties in your investment property’s suburb are selling and the prices they are fetching. You can get an idea of the latest auction and home sales results or get local real estate agents to do an appraisal.
Local councils can provide information about infrastructure developments planned for the area. Schools, shopping centres, new roads or rail links may contribute to higher property values. If you decide to sell, include information about new infrastructure when marketing your property; this can help paint a picture of what life could be like for your buyer.
If you decide to sell based on this information, you can take into account the timeline of your sales to determine whether it is more appropriate to sell now or wait until projects are finished.
Understanding the relationship between cooling and rising markets
It is always a good idea to keep a close eye on trends in the real estate market—from interest rates, to supply and demand, to know if you are buying or selling at the right time. Real estate insiders often refer to ‘cooling’ and ‘rising’ markets — but what do these terms mean?
A cooling market is one in which property sales are decreasing. In this market, potential buyers might be able to get the house they want for a lower price than would otherwise be possible, but sellers can generally expect less return on their property compared to a rising market. If you’re selling in a cooling market, you might need to be more open to negotiating with your buyer in order to get the sale over the line. You’ll be able to get a better sense of how low you can go if you’ve done your research into average sale prices in your area and how long properties have been sitting on the market.
Indicators of a cooling market include:
In a rising market, sellers may be able to sell their properties for a higher price at auction than they might if they were selling in a flat or declining market. However, buyers may face stiff competition and pay more than planned when looking to purchase a residence.
The following are signs of a rising market:
If you sell in a cooling market, changes in the property market could impact your sale’s success. Here are some tips for selling in a cooling market.
In order to sell in a downturned market, do research to find an agent experienced with selling in a downturn. Explore marketing strategies they have used before to get buyers interested in your property. Do they have a long list of active buyers they can contact? Look for an agent that understands you need to be creative when marketing the property.
It is important to understand the market and what you can expect from it. Buyers may be more aggressive in a slow market, so set realistic price expectations. The price you achieve should not be a surprise if you’ve got a good agent who has been upfront about how much your property might sell for.
To make your property attractive to potential buyers, you should be willing to spend money on home maintenance. Painting the exterior and tidying the front garden will make a good first impression on potential buyers.
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