The Only Time You Should Sell An Investment Property

by | Sep 3, 2021 | How to Invest in Real Estate, Property Investment

The golden rule of property investing is to buy well and NEVER SELL. However, there are always exceptions to the rule…

Firstly, let’s look at why you would keep an investment property? If you buy a great piece of real estate, in the right location, it will always create a passive income for you, so there will be no reason to sell it.

Also, selling property is EXPENSIVE! It costs you money in styling, agents fees, possibly a loss of rental income during the process, and taxes.

In a perfect world you would never need or want to sell an investment property.

But… as we all know, we don’t live in a perfect world and sometimes, even with the best of intentions, things don’t always go the way we expect.

So, are there times you should sell a property? And how do you know when it’s time to sell?

One major reason people go down this road is because they bought bad in the first place. Often times when we’re holding onto bad stock that’s weighing our portfolio down, the best option is to sell. 

We’ll break down what a dud looks like in a moment, but first lets’ tackle the big question – how did you end up buying a bad property?

 

LACK OF STRATEGY

Too many people who have got the means and desire to become a property investor jump in with zero strategy.

They listen to the wrong people about what, when and where to buy and make decisions that aren’t based on expert information or knowledge.

While some might get lucky and do alright, others end up with a lemon.

The real reason behind this is a lack of strategy.

Property investment is a marathon, not a sprint, and to play a long game you need a well prepared, thought out strategy. 

An investment plan will ensure you ask and answer questions like these and so many more:

  • How much income do I need to live the life I want?
  • How many properties will I need to make that income?
  • How long will it take me to buy those properties? 
  • Do I have the means to create financial buffers for myself and each of my investment properties should things change?
  • Do I know what kind of loan structure I need?

Without a strategy you’re in the dark, which is never a good place to be when it comes to smart investment choices.

 

WHAT IS A DUD PROPERTY?

In property investment a dud property is one that is holding you back. This one property is stopping you from achieving your goals of creating a portfolio that will create enough passive income for you to live your best life.

How does a property hold you back? 

  1. It’s in negative cash flow
  2. It’s too old

 

Negative cash flow is the last thing we want as property investors. Cash flow is king and without it we can’t buy our second, third or fourth property. 

Even if the property is growing in capital value, if the cash flowing out of your pockets is negatively impacting the servicing of your loan, you won’t be able to borrow enough to raise your next deposit. You also won’t be able to access any equity you’re making.

Equally, an older property that is costing you so much in maintenance costs and repairs that it’s sucking the life and cash out of you, is a dud. If you get to the stage where it’s going to cost you less to demolish and rebuild, than it will to fix up the current structure, you have a decision to make. 

 

WHEN IS THE RIGHT TIME TO SELL

While we know there might be times that selling is the right thing to do, take your time and think about what you’re trying to achieve.

Also, what are you going to do with the cash you get from the sale, where will that money go to serve you best?

Migrating your money from a property that you feel has done its job and has nothing else to offer, into one that has long-term potential might incur some costs, but they’re opportunity costs and might be worth the hit. 

Just make sure you consult some experts who can help you create a clear strategy. Coaches like those at Positive Real Estate can help you visualise your long-term goals and how to get there.

 

DEVELOP YOUR GAME PLAN 

Let the experts at Positive Real Estate teach you about the different strategies around buying and where appropriate, selling. 

Sign up for one of our information and education events, where you’ll be equipped with the tools, resources and support to thrive, and not fall behind on your path to financial freedom – whatever that may look like for you. 

Book your spot now and find out what you need to know about the current market landscape and how you can make it work for the ultimate wealth creation opportunities. 

Register Now for the Free Property Investor Webinar 

Click here to like us on Facebook and see more updates like this.

Hey there, do you enjoy the Positive Real Estate Blog? If you did, why don’t you book into a Property Information Night in your area and get more information from our team. You can do so here.

Turning $80k into $800k

Turning $80k into $800k

Welcome to the first episode of Property Investor Tales – Stories From The Front Yard!

Each week I get to speak to property investors from around Australia about their investing journeys. As the head of coaching at Positive Real Estate, I’ve been fortunate to connect with thousands of investors who have a story to tell. My hope is that from these incredible investors, your own investing journey is made that little bit easier. 

Abe Pasilidis is my guest today and he has an inspiring story to tell. I won’t give too much away but listen out for an $80k investment has turned into $800k, plus a hilarious story of property management gone wrong (when you DIY). 

Enjoy this conversation with Abe!

Once you’ve listened to this episode, I’d love it you hit the subscribe button  so you get notified every time a new episode drops. 

As you can guess I love hearing people’s property investor tales so if you’d like to share yours then please get in touch with me via email at  propertyinvestortales@positivementor.com.au You can watch all of these podcasts over on YouTube at Positive Mentor or at positivementor.com.au
Today, I am talking about some key lessons I learned from Dr. Andrew Wilson, a housing economist and a funny bloke. He is a member of the Chartered Surveyors Community, a wealth of knowledge, and a voice of reason when it comes to real estate investment. I’ve adapted his predictions into my strategies and share them with you today!

The Biggest Lie of Investing Revealed

The Biggest Lie of Investing Revealed

You have been lied to… by you! Today we are talking about the biggest lie you have been telling yourself about real estate investment and your wealth creation journey. Want to know what it is? I could just TELL you, but then you wouldn’t learn. It’s embedded in this podcast – feel free to DM me when you think you’ve found it!

Today, I am talking about some key lessons I learned from Dr. Andrew Wilson, a housing economist and a funny bloke. He is a member of the Chartered Surveyors Community, a wealth of knowledge, and a voice of reason when it comes to real estate investment. I’ve adapted his predictions into my strategies and share them with you today!

20 Investing Lessons from COVID-19

20 Investing Lessons from COVID-19

What do you need to know about corona economics? We have learned a lot of lessons through investing during the pandemic, and I want to highlight some of those today. I have a list of 20 however I don’t think I’ll get through them all! I want you to walk away from this episode understanding what happens when real estate markets transform and what will happen if we don’t take advantage of the lessons that are right in front of us.

A Property Investors Guide To Guaranteed Rental Increases

A Property Investors Guide To Guaranteed Rental Increases

Rent is your weekly or monthly incomes from your property. And it’s an income you don’t work for. It’s the absolute key to good cash flow and passive income, so it’s essential you are able to keep raising your rents at regular intervals. But, what makes it possible for property investors to do this?

My Real Estate Pet Hates

My Real Estate Pet Hates

This episode is about all of the things in the real estate community that piss me off. From investors consulting clickbait on social media to predatorial real estate agents giving themselves fake awards, we are going to talk about everything that is wrong with the real estate industry that you need to know about as a property investor. Hopefully, after listening to this you will be able to avoid some of the most common pitfalls that property investors fall into during their wealth-building journey.

Why Do You Want to be Financially Free?

Why Do You Want to be Financially Free?

Will you survive the emotional roller coaster that is property investing? It takes time, money and commitment to create a portfolio, but sadly most who start out don’t make it, why? Well, let’s Wealth Coffee Chat!

House vs Apartment – Which Is Better for Capital Growth?

House vs Apartment – Which Is Better for Capital Growth?

Many property investors favour one type of property – either apartments or houses. While there are pros and cons to both, which we will discuss here, one of the often forgotten advantages of houses is the investment you’re making not only in the bricks, but also in the land. Land value in itself increases over time, and investment in a piece of land also provides opportunity to renovate, subdivide and develop, all of which lead to greater capital growth.