Should you sell or hold your investment property?

More investors have sold up this year and it’s natural to wonder if you should join them. But should you get out of the market now or focus on long-term gains? It’s always worth assessing your exit strategy when it comes to property investment, and in this week’s blog we give you some pointers to do just that. 

Why are people selling at the moment? 

The number one reason for selling is an increase in holding costs. These rising prices include higher insurance, costs associated with newly introduced minimum housing standards and, of course, rising interest rates. 

These increased costs mean that for some investors an investment property is no longer financially viable, particularly when holding costs have risen at a faster rate than rental returns. 

How has this impacted Sydney investors?

A recent survey by Property Investment Professionals Australia found that 42.7 per cent of investors were experiencing tight cashflow, with one in ten dipping into savings to cover shortfalls.

Here in Sydney, we’ve seen a significant uptick in investors selling up, with 14.9 per cent of investors selling in the past year, compared to just 8.9 per cent in 2023.

This impacts the rental market as many rental properties are snapped up by owner-occupiers, adding to the rental crisis unfolding across the country. 

Should you sell now? 

The phrase ‘safe as houses’ exists for a reason – as an investment, it’s hard to beat a good-quality property, particularly in a world-class city such as Sydney where there will always be jobs, healthcare, education and a great lifestyle on offer, meaning you will always find someone wanting to live in your house or apartment. 

As always, it depends on your individual circumstances. Even if the higher holding costs are not forcing you to sell, you may want to reduce your overall debt, upsize your own home, help your kids buy a home, or simply invest elsewhere. Property prices rose dramatically during the pandemic but that growth is slowing, so now is not a bad time to sell up and invest your money elsewhere. Just as some people are selling, others are seeing an opportunity to buy as more properties come onto the market, particularly in light of the likely drop in interest rates next year. 

It’s important to get tailored financial advice and do your own research, from a wide variety of reputable sources and not just news headlines or social media. 

As a local real estate agent, I can help you understand what your investment is worth in the current market and how much it might sell for, based on comparative properties. 

What will happen next? 

With most commentators predicting that interest rates will fall next year, holding costs may ease for investors, and there are no plans to reduce negative gearing. So many investors will decide to ride out the high interest rates for a little while longer and ideally grow their investment. 

Looking after your investment property

Selling your investment property is one option, and if you do so, you want to ensure that no money is left on the table. If it’s been rented out for some time, it may need some cosmetic work prior to going on the market. This is where I can also help you by advising on the necessary repairs and upgrades for a smooth and successful sale. 

If, however, you decide to hold on to your investment, it’s worth having an experienced, local property manager who will take care of your asset and ensure that it’s getting the best possible rental return. Again, I’m very happy to chat to people about our property management services. 

Talk to Page&Co today 

If you are thinking of selling a property in the Northern Districts, or have one you’d like to rent out, we can help you. Feel free to get in touch with us with all of your investment property questions. Reach out to Page&Co today.