Selling: A Game of Snakes and Ladders


By Cam McLellan

Selling an investment property is like a game of snakes and ladders. You climb and climb towards financial freedom, but when you sell it’s like landing on a snake. You slide down the snake and have to start all over again.

The best advice is always to hold, hold, hold and hold.

Because the truth is you don’t need to sell property to access the profits you’ve made. When you sell up you destroy your profit margin because you have to pay capital gains tax (CGT) and sales agent’s fees. If you keep flipping properties, you limit your success to a rising market. That’s like taking a punt, and smart investing is about eliminating risks, not taking them on.

If you decide to sell an investment property consider the advantages and disadvantages before putting up that For Sale sign.


  • Legal fees
  • Agent’s sales commissions
  • Marketing costs
  • Capital Gains Tax (CGT)
  • Opportunity cost


CGT is one of the biggest costs associated with selling and investment property. You will be handing between 25 and 50% of the increased value of your property over to the government. CGT is charged at 50% except if the property has been held for longer than one year in which case you will pay 25% of the increased value. I don’t think the government deserves this money. It should stay in your pocket. After all, you’re the one who took the initiative to invest!


When you sell a property you lose the opportunity to profit from any future market price increases. You need to take this into account when you’re considering whether or not you should sell. Ask yourself how much money you will lose if the property doubles in value over the next ten years.

It’s always better to buy well and hold for the long term. If you need to access the capital gains you should be able to restructure your finance so you can access the useable equity. This means you avoid incurring CGT and other costs. Most people who sell one investment property end up buying another one anyway. Then they have to pay purchase costs once again, losing money twice over.


  • Accessing capital gains
  • Reducing debt
  • Cut out deadwood


An equity gain is only a gain on paper until it’s accessed through selling or refinancing. I prefer to refinance rather than sell.


The only time I would seriously consider selling an investment is when I want to reduce debt to improve cash flow. This may form part of an exit strategy. I don’t advise this if you are still trying to build your portfolio.


You may need to consider selling if you’re holding an under-performing property. Some people make the mistake of holding onto poor investment properties or keeping their home as an investment when they buy a new one. The problem with this is that most homes don’t meet the basic criteria of a good investment that will perform at the required level, especially if CGT exemptions can be used. Talk to your accountant about CGT exemptions because they can be used years after you move out of your primary residence.

You may buy and sell several family home in your lifetime or you might decide to sell an investment property as part of your exit strategy.


  • Smart investors hold for growth.


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