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.

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.

3.

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.

Melanie Dennis is a Director at Domain Property Advocates and winner of the prestegious Victorian and Australian Property Manager Award. If you would like to find out how Domain Property Advocates can assist you with your investment property call Melanie on 9853 5599 or directly on 0416 218 003.

If interested in learning more about this update please contact me today!

Tags: capital gains tax, Cons, debt, Domain, domain property, equity, injection, investment purchases, property advocates, rash decisions

As Domain Property Advocates continues to grow I will continue to provide superior service to those choosing to use property as their investment. It is an important choice of who to choose as the one responsible to look after your property. You can be sure that Domain Property Advocates will always strive to be the best.

 

This entry was posted on Wednesday, September 16th, 2009 at 6:32 am and is filed under Buying Property. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.