I own a unit in a complex of five and I noticed this week that one of the other units in the complex is up for sale.
BY VANESSA DE GROOT
Of course I was very interested to see this, because I’m keen to see how long it takes to sell, if it does sell and how much it sells for.
After informing my co-owner (also my brother) that one of the units in our complex is up for sale, he pointed out to me that when it sells, ours will be the only one that is with the original owners. You see, the unit was brand spanking new when we bought it just shy of four and a half years ago.
I realised he was right and even though I’ve toyed with the idea of selling it, for various reasons, it reaffirmed for me that we must hold on to our property for much longer.
"That’s why so many people don’t make money from property," I told my brother. "They sell too early!
You have to be in it for the long haul."
"True that!" he replied, as I breathed a sigh of relief, glad we were on the same page.
I understand why people decide to sell their properties after just a couple of years. While you might go into an investment thinking you’ll keep it for many, many years, the truth is that anything can happen.
You might be forced to sell because something else has gone awry financially and you need the money, or your co-owner (if you have one) might decide they want out, in which case you’ll have to sell if you can’t buy them out.
Life can throw any number of challenges at you and unfortunately, that may mean that you have to sell your property.
And let’s be honest – it’s not a piece of cake investing in property. Sometimes it can be hard work. There’s the process of buying that can create stress, including filling out paperwork, making sure you meet deadlines for finance etc., and ensuring all is right for settlement. Not to mention the process involved in renting the property out and making sure the property managers are doing their job, along with any dramas that might come up with the tenants and unexpected costs.
If you haven’t seen much growth in your property you might think that all the hassle – and financial strain in keeping it – isn’t worth it. You may as well pack it in, sell it up and not have to worry about it. After all, it’s not going anywhere in terms of value anyway.
But think carefully before you do that. If I had five cents for each person I’ve spoken to who has said, "the value of the property didn’t go anywhere for the five years I owned it, so I sold, but if I still had it now, it would be worth a fortune", I’d in fact have a fortune myself.
And of course there are significant costs with buying and selling a property, so if you’re going to get in and out within five years or less you may as well forget it, because those costs will eat up most of your gain. And then the hassle certainly won’t have been worth it.
We’ve all heard it a million times before, but it’s all about ‘time in the market’. Property is a long-term deal – you can’t just expect to get in and out in a few years and make your millions, being able to retire and sip cocktails on the beach (unless you’re extremely lucky!). You just need to be patient (I know, it’s very hard!) and wait. If you hold your property, in 10 years’ time you’re pretty much guaranteed to have made money. You just have to be confident, look at the history of property price growth and have faith.
I’m sure there are already people reading this and poised to click the comment button, fiercely typing things like: "yeah right, just keep telling yourself that will happen, property investors are so optimistic… blah blah blah". But the reality is that I do honestly believe that, or else I’d do the same – I’d sell up and invest in something else. And I believe those naysayers will be the ones complaining in 10 years that property is unaffordable and prices are ridiculous, and I’ll be grinning from ear to ear that my properties have grown so much in value.
I’m not overly optimistic either – in fact I’m probably one of the most cynical people you’ll come across. There’s no doubting that the property market is definitely going through a slump and there are times when I’ve wondered if it’s worth all the stress, but my underlying belief (and it’s a very strong belief) is that it’s worth it. I’m 100 per cent confident that property is what’s going to give me a stable financial future and I’m willing to stick out the bad times to reap the rewards at the end.
Tell me what you think. Have you sold a property prematurely only to find out that its value jumped not long after? Do you wish you’d held onto a property longer? Or do you think if it’s too much hassle you should just sell up and move on?
Vanessa De Groot is the deputy editor of Australian Property Investor magazine, www.apimagazine.com.au