It’s a common misconception amongst property investors: “never sell your property”. Although residential property investment requires a long-term outlook to ride out market fluctuations and maximise the effects of compound capital growth, even the best quality investment asset has a use-by date.
The whole point of investing is to improve your quality of life. At some stage, you’re likely to reach the point where selling a property is the only way to help achieve further investment or lifestyle goals. Here, we look at four situations in which it may be appropriate to sell.
Making room to move.
If you have a growing family, you may need to renovate or extend the family home. If you take out a loan to meet these expenses, you’ll pay the full amount of interest, because expenses associated with the family home are not tax deductible. By contrast, if you sell your investment property, you can use the proceeds to pay for the home improvements outright.
When you’ve completed the renovations, focus on paying down the remaining debt on your home so that you’ll be well positioned to buy another investment property later down the track.