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This article was supplied to us by Rhys Trenhaile, he can be reached via his website.
Why Now is the Wrong Time to Sell Your Income Properties
Broker Rhys Wyn Trenhaile of The Vanguard Team at Manor Realty Ltd. recently had a client contact him to help sell three of his income properties.
His client of 15 years was surprised when he was told not to sell them right now. Right now is the wrong time to sell your income properties.
Why would Trenhaile say this?
“Ultimately, we feel that property values are still going to go up 10% to 15% per year for the next two years,” he said. “We asked why he wanted to sell, and it turned out he was looking to free up money for another investment.”
Trenhaile pointed out that by keeping these properties, suddenly, he can realize upon these double-digit property gains over the next two years.
He also reminded his client that when you borrow money you owe no taxes due to the fact you are borrowing.
Considering you can currently borrow at historically low interest rates, it becomes more cost effective to borrow at 2.5% to make 10% profit, with a net gain of 7.5% per year.
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That’s a pretty good deal, especially when you get keep your properties and not pay any interest.
“When the time is right, we will eventually end up selling those properties. For him, now is not the right time,” says Trenhaile. “I think it’s important to understand. It’s not to give ourselves a pat on the back, but to show the investor that you need true professionals in your corner who are going to give you the right advice.” The question to ask yourself is what would the real estate agents do with their own properties?
“That’s the advice we give our clients. And that is the advice you should be seeking out wherever you invest.”
If you’re looking to invest in Windsor, Ontario, speak to a member of The Vanguard Team at Manor Realty Ltd. (519) 250-8800 or visit thevanguardteam.com.
Talk to a Mortgage Broker Before You Sell Your Income Properties
Before you try to sell any of your investment properties, it is incredibly important that you discuss it with your broker first because in the event the property still has a mortgage being loaned against it, there may be penalties or consequences to selling early and breaking your term.
To discuss the result of breaking your term early, click the link below to book a free strategy call today.