With recent Federal Budget announcements and ongoing discussion around proposed changes to Capital Gains Tax concessions and negative gearing, many property investors are beginning to reassess their long-term strategies.
While the details and timing of any legislative changes are still evolving, investors considering a future sale should be careful not to make decisions now that may limit their options later.
Here are six of the biggest mistakes we believe investors can make when preparing to sell in a changing market.
1. Renewing the lease for 12 months
If you later decide to sell, there is a strong chance your buyer pool may consist primarily of owner-occupiers rather than investors.
If you are uncertain about your plans, our recommendation is to keep your options open by considering a shorter lease renewal of 3–6 months rather than committing to a long-term tenancy.
This provides flexibility to:
- Offer vacant possession if needed
- Allow the property to be professionally styled
- Improve presentation prior to sale
- Target emotionally driven owner-occupier buyers
Presentation and atmosphere can have a significant impact on buyer competition and final sale price.
2. Selling with tenants in place
While there are certainly exceptions, most properties present better for sale when vacant and professionally styled.
Vacant homes generally allow:
- Better marketing photography
- Easier access for inspections
- Greater flexibility for trades and maintenance
- More buyers through the property
Many tenants are extremely cooperative during the sales process, however it is important to remember that tenants do have the right to decline photography and open for inspections, which can sometimes affect marketing campaigns and buyer access.
There are also restrictions surrounding inspections once a Notice to Leave has been issued, which may impact the ability to complete preparation works before going to market.
3. Not reviewing the rent against the current market
With ongoing rental demand and reduced investor supply, market rents in many areas continue to rise.
When selling an investment property, the rental return can influence how buyers assess value and investment performance. Ensuring your property is rented in line with the market can help strengthen its position when it comes time to sell.
It is also important to remember that rent increases can now generally only occur once every 12 months.
4. Delaying maintenance and presentation upgrades
Owner-occupiers and first-home buyers are increasingly looking for well-maintained, move-in-ready homes.
Completing maintenance and cosmetic improvements while the property is still tenanted can:
- Save time later
- Reduce stress before sale
- Improve presentation
- Potentially be more tax effective depending on your circumstances
Small improvements can make a significant difference to both buyer appeal and final sale results.
5. Staying with an average property manager
The quality of your property management can have a major impact on both your rental return and your property’s condition when it comes time to sell.
A proactive agency should be able to:
- Arrange repairs quickly
- Coordinate maintenance efficiently
- Recommend value-adding improvements
- Prepare the property strategically for market
- Manage tenant communication professionally during the sales process
Strong property management can significantly reduce stress and improve the overall sale outcome.
6. Choosing the wrong sale timing
One commonly misunderstood area is the timing of Capital Gains Tax obligations.
Generally, the relevant date for CGT purposes is the contract date — not the settlement date.
For example, if you would prefer the gain to fall into the next financial year, the contract would generally need to be signed on or after 1 July.
We strongly recommend obtaining independent financial and taxation advice specific to your circumstances before making any decisions.
A recent client experience
One of our recent investor clients completed 11 separate upgrades before going to market and achieved an unconditional sale within 30 days of the property becoming vacant.
Here is what they had to say:
“We sold our apartment while living out of town, and after years as a rental it needed significant work to prepare for sale. The Penroses managed the entire process seamlessly - organising trades, keeping us informed, and making everything feel easy.
In just three weeks the apartment was transformed. Their communication was always clear, responsive, and professional.
The result was a sale at auction above our expectations.”
Your Next Steps
If you would like advice on how to best approach the selling process, we would love to speak with you about your options and help you maximise your sale result and long-term wealth strategy.
We can assist with everything from renovations and maintenance coordination through to preparing and managing the sale process efficiently and cost effectively.
Grant Penrose – 0418 747 997 – grant@penroserealestate.com.au
Christina Penrose – 0418 737 327 – christina@penroserealestate.com.au
Please note the above information is general in nature and should not be considered financial or taxation advice. Each individual situation should be assessed based on its own specific circumstances and professional advice should be obtained where appropriate.