People are selling because they’ve seen an increase in the value and are putting those funds into a home renovation or buying something personal using 'investment' money.
Imagine this
If you had a golden goose that gives you a golden egg each month. Would you sell it for 10 golden eggs today? Or continue to get golden eggs for the rest of your life?
Why?
Why did you buy your investment property? Why are you investing? What is the goal?
Is it for cash flow? Is it for capital growth? Is it your retirement plan?
I am always curious as to why people invest.
I know why I bought my first investment at 18, I had been reading all the property investment books, (hello rich dad poor dad) and had dreams of being able to retire early, to choose when i wanted to work and to make my money work for me.
I read all of them, but at the time it felt like that ship had sailed. One author (0-130 properties) espoused wisdom and knowledge as they were all cash flow positive but back in the early 2000s, it was very difficult to find CF positive properties even then. We’ve seen huge price increases in that time and despite a housing crisis, rents are still not keeping up.
I see most investors aren’t chasing a yield, as its not there, and investing for capital growth.
It also used to be that you could buy a property for less than its worth, and that is far less common now, as most home owners are extremely well educated and unless they are facing financial pressures, will be less likely to accept an offer under market value.
Property is not a get rich quick scheme, but its reliable when you play the long game.
Yes we all know someone who got lucky with the timing of the market, but that’s not reality for most property owners.
My advice is if you are going to invest in property, it needs to be for the long term. Generally its 15-20 years to see the results truly materialise, and even then, not to harp on about this, but why would you sell the golden goose?
We all know life happens. When you make plans, the universe tends to laugh and show you a different path. So there may be times that you need to consider selling.
However having a bad experience with a tenant shouldn’t be a reason and I’ve seen it too often where the investor is just frustrated and disappointed. Ensuring you have excellent property management in place to manage your investment is crucial to your success.
Remembering why you did this in the first place will help you to make decisions about your plans with your property.
And if you are still uncertain about what to do? Reach out to someone you trust about the market, and who understands the pitfalls and highs of investing, and can walk you through your options. You can call me anytime on 0426 241 676 or hello@tayloredproperty.com.au
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