How long should you hold an investment property?

Before investing in any asset class, you should consider your ultimate goals and timeframe to make it happen, for property investors it’s important to remember that real estate investing is a medium to long-term strategy.

Investing in real estate can make you a millionaire, however if someone says it can happen overnight, alarm bells should start ringing and you’ll probably find that you’ve found yourself a property spruiker.

These are the people you come across at FREE property investment seminars that offer to educate you on how to make easy, fast money… Unfortunately, the easy, fast money is usually for themselves by receiving commissions and kickbacks for recommending off-the-plan developments, they can collect 3-7 percent of the purchase price.

Historically, property has proven itself to be a very lucrative and safe investment strategy. Generally speaking property in Australia tends to double in value every 7–12 years, if you invest wisely and purchase at the right point in the property cycle.

Identifying the right investment property can be time consuming and it’s also very complicated. Where and what you buy will affect the return on your investment property, so you need to get things right.

Your goal should be to hold onto your investment property through at least one full property cycle, if not longer. As a general rule of thumb, the longer you hold an investment property, the more likely you are to make a great profit.

There may be other factors influencing how long you hold onto property. It’s critical to have a plan to pay off your non-deductible debt as quickly as possible. You may be better off selling an investment property that has experienced significant growth in order to pay down your main residence debt and then invest in another property, it’s a process of swapping non-deductible debt with deductible debt.

You should always seek independent financial advice from your Accountant and/or Financial Planner to work out the best tax effective strategy to maximise your wealth.

If you’re new to real estate investing, download for FREE “My Top 10 Real Estate Investment Rules”. If you’re ready to invest but don’t know where to start? then talk to us. Just send me an email and we’ll set up a time to chat.