Lease or Sell? Sometimes, the circumstances leave you with a dilemma...

The great investing dilemma: Lease or sell?

Should you lease or sell this property that you've put all this work into?

This site is mostly about investing in property so that you can rent it out for cash flow, but sometimes you might find that it is more practical to sell when you have finished, especially when you have ended up doing more major renovations than you originally planned for.

You might finish your renovation, and find that the amount of extra borrowings is not covered by the increase in rent you will receive. This can happen, no matter how carefully you planned in the first place.

On the other hand, you might find that a property you planned to sell hasn't risen enough in value, so you may need to rent it out for a while until the market catches up again. This is happening to quite a few investors with the Global Economic Crisis. Really, in most circumstances, investors at the moment will be needing to buy and hold their properties until things pick up and buildings regain capital value.

You might also be so stunned at the new (high) valuation on the property, that you find it's better to sell, take the profits, and buy another two (or similar) to increase your returns that way.

When deciding whether to lease or sell your investment property, it pays to be flexible - as with anything. Going with the flow in changing times is a very good thing, although using it as an investment strategy in itself is no substitute for good quality research and due diligence.

Whatever you do, make sure that you always get a valuation on your property, both before and after renovations, and every single year that you own it.

Check with a property valuer for the total value of the property, and compare with a couple of real-estate agents for the rental returns on yours, and similar properties.

This way you can always be sure that your decision to lease or sell is a sound one, as circumstances change, and the wheel of the property cycle goes around, and you are always getting the best return for your investment.

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