Many seasoned investors tell you that "you make money when you buy". Or you'll read from books that you should "buy but never sell". The reason? Trading property costs a lot.
"Selling an investment property is like killing the goose that lays the golden eggs," says Paul Do, property investor and author of I Buy Houses. "Not only do you put an end to the golden eggs in terms of the capital growth and rising rental income, but you incur transaction costs up to 10% for a round trip as well as capital gains tax that take a large chunk out of your yield.You should avoid selling any of your properties if possible to maximise your time in the market and take advantage of compounding effect. You also save on transaction costs and capital gains tax (on investment properties) when you do not sell," he explains.
But is there a good time to sell an investment property? Find out in the latest issue of Your Investment Property magazine out on sale now.
