There are many different reasons why someone might find themselves having to sell their holiday home or investment property.
Whether it’s because of changes in the market, a personal reason or, in the words of Don Corleone, someone made them an offer they couldn’t refuse, thousands of Australians make the decision each year to consolidate their assets and sell their second (or subsequent) property.
The benefits of doing so depend on each seller’s individual circumstances, feeding back into their reason for wanting to sell the property in the first place, but the end results are largely positive for a vast majority of vendors.
So why should you sell your investment property or holiday home? These reasons might fit:
Growth in property value
A fairly universal reason why someone might feel selling their second property would be advantageous is a strong growth in property values in the area. The housing market is fluid and ever changing, and those with a keen eye will be able to notice trends and spot a solid time to sell.
After all, the purpose of an investment property is to get a return on that investment; for some that may come through the generating of ongoing income through rent, but for others a sale for a good profit after a few years is enough.
Of course, second properties are often located a fair distance from the owner’s residence - investment properties perhaps several suburbs away or on the opposite side of the city, holiday homes often located across the country - which is where being able to find a real estate agent with solid local knowledge comes in handy to make sure the return on the investment is as high as possible.
Decrease in property value
An owner might want to sell their holiday home or investment property may simply be the opposite to growth in property value: a sudden and painful decrease in the value of your property.
Investment properties that no longer have a strong rental yield, that are perhaps getting older and need repairs or are located in areas that are decreasing in value, could start costing their owners more money than they are earning them, making a sale seem like a good option out.
Rather than selling up straight away, it’s important to work with a real estate agent with solid knowledge of trends in the local market to ensure the decision comes after a thorough exploration of all the options.
You get a great offer
Most of us would find it difficult to say no to an offer far exceeding the value or initial price of one of our possessions - it’s funny how we can part with any precious item we own if someone offers the right price in return.
Here too, however, it’s important to get an independent appraisal of your property to ensure the offer actually stacks up; again, living far from a second property you purchased several years ago means it can be hard to get a handle on what the current going rate is in the market.
Assuming you have been offered a price for your property way above what you initially expected or even thought it deserved, this strong offer can be a deciding factor in whether or not an owner would want to sell a holiday home or investment property.
You need to raise capital
For many, investment properties or holiday homes are purchased at a time when finances are comfortable - unlike the stereotypical first home buyer, an investor or holidaymaker isn’t scraping to put together the mortgage. However, circumstances change and a sale may become necessary.
If you’ve found yourself in need of some major capital, selling an investment property at ideally the right time is an effective way you can achieve this. Working with an agent that specialises in selling properties in the area in which yours resides can ensure you not end up in a worse financial situation than you started out in.
Unloading assets like investment property or holiday home is a great way to put some much needed cash back in your pocket - with a profit.
Visit our blog for more information on selling your investment property.