An investment property is often the gateway to the lifestyle you have always dreamed of – or a way to sustain it if you are already there. But if you leave profit on the table, then you are making a big mistake. These five ways to maximise your profit will help you walk away with more every time.
1. Tidy up
We all know that the quickest way to add value to a property is to upgrade it. Remodel the kitchen, pave the driveway, add gates, and so on – these are all big jobs which might actually end up being more expensive than they are worth. Be sensible and do your research before making any decisions.
It may transpire that you are better off making a lower investment in smaller remodelling projects that will add more value like-for-like. Focus on curb appeal, as the front entry door and garage door happen to make the biggest first impression on buyers.
2. Get a good agent
A good agent can make or break your sale. When we say good, we mean really good. The kind of agent who will bring the buyers they know will fall in love with your property and will be willing to pay over the odds.
If you’re willing to put in the work, you can list your property online yourself and avoid agent fees – but you need to be prepared to spend a lot of hours on marketing it right and getting your listing in front of the right eyes.
3. Bide your time
If you don’t necessarily need to sell as fast as possible, then take your time. Don’t jump at the first offer that comes your way, especially if it happens to be a low-ball. Insist on your asking price, and no less. If you end up in the enviable position of having two offers at once, you can also play them off against one another by letting them know you have received interest from elsewhere and need to decide between the two parties. Don’t rush into a sale – see how much more you can get.
4. Watch out for taxes
Remember that when you make a sale, you may have to pay capital gains tax or income tax on the profit. This could cut into your money by a considerable amount, so you need to think about this carefully and consider working with a tax advisor. For example, if bumping up your sale with a bigger offer would put you into a higher tax bracket, you may end up actually losing money. Control your gains and make sure you are always getting the most you can after tax, not just before.
5. Watch your market
Remember that you might not be choosing the best time to sell. Instead of deciding to sell on a whim, wait and watch your market. Different areas will have different timelines: some are up-and-coming, others are on the way out, and some will remain steady for years.
Your particular property’s value may not rise or decrease at the same time as the national market. With this in mind, wait for your property values to peak before selling. A little bit of patience could net you a big profit when you make that sale. Make sure that the time is right for your property, and that it’s not just a case of you wanting a quick cash injection now.
When it comes to selling your investment property, there are lots of negotiating tricks to use and ways to ensure you get the right price. These are the main tips you will want to stick to, as they will keep you safely in profit with a good return on your investment. If you keep them in mind every time you sell, your portfolio will grow rapidly.
Sienna Walker is an avid who enjoys writing on a variety of topics. Feel free to reach out to her on @SiennaWalkerS.