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What to consider before selling your property

Before cashing out your property, you need to ask yourself some few questions and make observations before making your final move. While you might be thinking that you have no time to waste in your business, you certainly do not want to incur losses, or little gains, and regret afterwards. Here are some tips

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Demand and supply

This is what most investors will look for when deciding when to sale. Demand and supply are so crucial in making the decision to sell. The prices for commodities or services will go up when the demand is high and go down when supply exceeds the demand. Always keep at pace with the demand and supply ratio in the market and sell when demand is high and supply is less.

Opportunity costs

There is an advice given to most investors that they can buy, but never sell property. However, this decision is based on the opportunity costs of the property you are holding on to. Imagine that you have a property worth $200,000 and have a 5% growth rate per annum, and there is still another property out there that has the same value, but with a growth rate of 10% per annum. By hanging on to the property with 5% growth, you are denying yourself an extra 5%, so it is time to sell that property and invest wisely.

Time in and time out in the market

The nature of the property market is that, the more investment you have, the more money you get, because of the compound growth effect. However, as an investor, it is important to know that compound growth fluctuates. Sometimes it surges, while other times it goes up. It is important to monitor the market and know when to enter (buy) or sell (exit) depending on the markets compound growth rates. When the compound growth rate is low, it is time to sell.

Calculate the cost

There are costs attached to either buying or selling, all of which might be simple, or complicated depending on how they affect your investment. While calculating the opportunity cost, or determining when to get in or exit the market may be easy, estimating or calculating the future capital growth in the market might be hard and inaccurate. It is important to correctly estimate the future capital growth of any property that you intent to sell before going ahead and replacing it. It will be disgusting to replace a property whose future capital growth is promising.

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2 comments

  1. Love those bedroom shelves! Congrats on all your new additions, you totally deserve them so do2#18n&7;t beat yourself up about it. And to echo others sentiments, I hope Maya starts to blog too.

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