7 Steps To Take Before Selling Your Northern Beaches Investment Property
If you’re thinking about selling your Northern Beaches investment property, you’re not alone. The rising interest rates, inflation, and cost of living pressures have made many property investors consider this option. But before you make a decision, there are several important steps you should take to ensure you’re making the best financial move. Here’s a comprehensive guide to help you in the process and optimise your investment.
Connect with Your Property Manager
First and foremost, have a chat with your property manager. They can provide a detailed rental health check on your property, helping you understand your current maintenance expenses and identify opportunities to minimise them. Consider whether affordable upgrades could increase your rental income without a significant outlay. Simple improvements, like fresh paint or modern fixtures, can make your property more attractive to tenants, potentially increasing rent and reducing vacancy periods.
Consult a Mortgage Broker
Next, speak with a specialist mortgage broker. They can review your current mortgage and ensure you’re getting the best interest rate available. With interest rates on the rise, refinancing might be a viable option to manage your expenses more effectively. A broker can provide tailored advice, helping you understand if restructuring your loan can ease financial pressures and allow you to retain your investment property.
Seek Financial Planning Advice
A meeting with a financial planner can offer a long-term perspective on your investment goals. Are you selling because of short-term pressures, or does it fit into your broader financial strategy? A planner can help you evaluate whether holding onto your property might yield better returns in the long run. They can also assist in setting realistic financial goals and developing strategies to achieve them, ensuring your decisions align with your overall investment plan.
Update Your Depreciation Schedule
Make sure your depreciation schedule is up-to-date. This document outlines the tax deductions available for the wear and tear of your property over time. An updated schedule can maximise your tax benefits, improving your cash flow and making it easier to manage your property expenses. It’s a simple yet effective way to enhance the financial performance of your investment.
Obtain Tax Advice
Before selling, get professional tax advice. Selling an investment property can trigger capital gains tax (CGT). As noted by the Australian Taxation Office (ATO), “A capital gain or loss is the difference between what it costs you to obtain and improve the property (the cost base) and the amount you receive when you dispose of it.” Understanding the potential CGT implications and other exit costs, such as agent fees and marketing expenses, is vital. These costs can significantly impact the net profit from your sale.
Evaluate Your Financial Position
Assess your financial position with a comprehensive review. Consider the impact of selling on your overall portfolio and future financial goals. Sometimes, the costs associated with selling, including CGT, agent fees, and marketing expenses, can outweigh the benefits. It’s important to ensure that selling aligns with your long-term financial objectives.
Consider the Market Conditions
Evaluate the current market conditions in the Northern Beaches. Is it a seller’s market where you can achieve a premium price, or are prices subdued? Your property manager can provide insights into recent sales and rental trends, helping you make an informed decision.
The Importance of Strategic Decision-Making
Selling an investment property is a significant decision that should not be taken lightly. It’s essential to consider all factors and seek professional advice to ensure you’re making the right choice for your financial future. By following these steps, you can make an informed decision that aligns with your long-term goals and maximise your investment.
Greycliffe Property: Your Trusted Partner
We understand how complex managing and selling investment properties can be. With over 60 years of combined experience, we offer personalised advice and support to help you make these challenging decisions.
Contact us today for a no-obligation consultation and let us assist you in making the best choice for your investment property.