When is the best time to sell your investment property?

Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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, updated on June 6th, 2023       

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The current property market can have you wondering whether you should still hold onto your property or if you should let it go. Timing the sale of your property is crucial when it comes to making a profit or selling at a loss. Here are a few things that you need to carefully consider before putting your investment property on the market.

Avoid selling in a panic

It may sound like property Armageddon in the news with property values falling and prices being at their highest. However, keep in mind that the Australian property market is made up of different sectors like a giant quilt.

Just because one area in the property market is experience a slump doesn’t mean that the area in which your investment property is in is experiencing the same thing too. Data by Corelogic also revealed that holding your property for more than 6.5 years is more likely to sell at a profit.

Therefore, researching information on the property performance in your area is vital to help you make a sound decision than to sell in a panic.

Are you losing money instead of making it?

With 7.9% of Australians owning investment property, losing money in an investment that you have poured your finances in can leave a bitter taste in anyone's mouth. It could be even more difficult in cutting off a property that you have grown an emotional attachment to. Corelogic revealed that over 60% of property investors are losing money by holding onto property that reduces their net cash flow, but if it is biting huge chunks into your budget you may be better off selling your property.

It is important to consider the various costs that come with holding onto your property such as; the holding costs, income tax, land tax, and other ongoing costs. If you are able to find a similar property in another area that is experiencing a 10% growth in property values, you may be better off selling it and making an investment in the new property.

The mounting debt is not going away

When looking to sell your investment property it is vital to assess the situation that you are in. You can also speak to a financial advisor in terms of finding steps to help you manage your debt in the way that works for your finances. If your property has caused you to accumulate debt that doesn’t appear to be decreasing then it is time to walk away. Sometimes it's all about waiting it out to see if your capital gains will improve over time so that when you decide to sell you walk away with a cash flow positive portfolio. It can also help you avoid selling off your assets at a loss to pay off your debt.

Diversification that comes with tax benefits

Putting your eggs in one basket can be the common mistake that can trip up first-time property investors. That is why diversifying your portfolio can be beneficial, especially with the volatile property market. You can also sell your house to make the most of tax benefits. For example, you may opt to choose to sell your property investment when the marginal tax is low to incur fewer Capital Gains Tax. This is basically a tax that is levied on profits that you make when selling off an asset.

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