Posts Tagged ‘Sell Property’

Do you need a cash injection of funds? Are you thinking about selling or refinancing your investment property?

Often investors can make rash decisions when under pressure. The following is an overview outlining some of the pros and cons of selling Vs refinancing your property.

 SELLING

The Pros

1. Benefit with cash from the sale of the property.
2. Use the cash from the sale to reinvest in property or other investment strategies.
3. Reduce personal debt.

The Cons

1. You will most likely pay capital gains tax on the capital growth you have achieved.
2. You will pay fees associated with the sale, i.e. real estate agent fees, solicitor fees, etc.
3. You will no longer be able to make further investment purchases with the equity from the investment property.

 REFINANCING

The Pros

1. Use the capital gain amount as equity to refinance the purchase of further investments or simply redraw the cash equity.
2. As the rent continues to increase, your serviceability for the loan will also improve allowing for further investment purchases.
3. Achieve a better interest rate or loan package.

The Cons

1. Increased exposure to interest rates with higher debt levels.
2. Associated costs with re-financing.

It is important to focus on what your goal is. Do you want to make a quick profit from your investment property?  If so, then selling may be the best option. 

However, if your goal is to build a wealth portfolio then you may wish to refinance… Call Raine & Horne Glenelg on 8376 8844 – we’ll look after you

This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management experts