So you’re ready to sell your investment property. Great! Maybe the market is just right to make a strong return on your investment. Perhaps you’re looking to downsize your portfolio or move into a different kind of investment. Whatever the reason, here are the steps you need to take to get that investment property sold.
Ask ‘how much is my property worth?’
First, you need to find out what your investment property might sell for. You can speak to an agent and get real estate advice alongside your own property research. Make sure you get a few opinions and double-check any figures you’re given.
A great place to start is by getting a free online property value report from Upside. In under a minute, this handy report will give you access to information from Australia’s leading real estate data providers, covering insights such as a value estimate of your property, recent sale prices of homes in the area so you can see how where your property sits on the market, as well as suburb demographic data.
If you can, go to auctions for similar properties, and see what they sell for, as well as how many people attend and bid. This is a great way to get a ballpark figure for what your place is worth and how sought after it might be.
Compare real estate agents to find the best
All this information is good to have when you eventually approach an agent – make sure their property appraisal is in line with the research you’ve done. It’s important to note here that it might be tempting to go with the agent that offers you the highest property appraisal estimate, but unless they can deliver, it’s just a number. That’s why it’s important to do your property market research carefully – particularly if your investment property is in a location you’re not familiar with.
The best way to decide on the right real estate agent for you is to contact a few different agents to try to get a feel for how they work. Be sure to research and ask any prospective agent appropriate questions to make finding the right agent a lot easier.
Consider the tax repercussions
Since your property isn’t your main home, selling your investment property will attract Capital Gains Tax (CGT). If you’re not an Australian resident for tax purposes, you may also be liable for a Capital Gains Withholding cost equal to 12.5% of the value of the sale.
Notify your tenants
Once you’ve decided to sell the property, you must give notice to your tenants. Check details of their tenancy agreement and the laws in your state to make sure you comply. After finding out that they have to move, your tenants may decide to leave sooner rather than later – some landlords will offer a reduced rent in exchange for the disruption of viewings and maintain a good relationship. While it doesn’t have to be a deal-breaker to have people living in the house while you show prospective buyers, there are a few important things to look out for that can trip investors up - be sure to familiarise yourself with them!
Decide on an auction or private treaty
With the help and advice of your agent, you also need to decide on whether you want to go for auction or a private sale. Both have their advantages, but it’ll depend on the property in question and the property market. If your property is in high demand, or unique in some way, the chances of it doing well at auction are increased.
Ensure your agent and tenants are in communication
Tenants must have 24 hours’ notice of an inspection, so it will be important for your agent to be aware of the legal requirements around selling a tenanted property. Discuss this with your agent ahead of time so no errors are made, as this could result in unhappy tenants and unhappy prospective buyers.
When you’re selling your investment property, it’s important to maximise the return on your investment. One way to save is by going with a flat-fee agent – chat with us about how we can help.