Better a buyer, then a seller

Many of our investment clients are sitting on significant capital gains and the temptation to sell may be quite strong – especially listening to the current sales patter.

Sales agents are finding it difficult to sign up good residential property and, in several cases, agents are ramping up their tactics to get people to list their properties for sale.

However, I’d like to add a note of caution to this situation.

I have some concern that investors may be mistakenly encouraged to sell, particularly those older property owners who might be thinking about retirement or redirecting the capital growth they have built up to somewhere else.

Of course, it might very well be the right time to cash in, for genuine reasons that fit your overall financial strategy. However, if you have a choice, I think there is still quite a bit more growth to be had, before it’s time to sell.

In fact, I’d even like to suggest, for some investors, rather than cash in a property, consider borrowing against it and investing again. As there are some hard to resist opportunities to be had at the moment from those who have been talked in to selling!

During the next five to seven years, new and existing investment properties will provide a welcome extra capital component and, despite a few seasonal hiccups, steady and growing income. Short term blips, aside, our population continues to grow naturally and from immigration which means the housing shortage in most city areas will continue for many years to come.


Food for thought.

Until next week