Are you in the process of completing your townhouse development project but are unsure if you should be selling a townhouse or holding it?

Well, stick around because, in this article, I will share legitimate reasons for each option – we work with clients from both camps, so we have some great insights that will help you make your own decision confidently.

Let’s get into it.

Now, something that I want to point out immediately – is it’s important to have your plan mapped out before you start your development project

It’s not critical, but understanding your game plan from the beginning will help you maximise your returns on the other end.

It will allow your accountant and other relevant consultants to get you set up correctly from an entity, trust, and tax minimisation standpoint.

Side note > learn the secrets to negotiating with a real estate agent click here.

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Reasons to Sell

Let’s look at the reasons to sell your completed townhouses.

Selling a townhouse or selling all at the end will mean you get to pay down your debt, allowing you max equity and serviceability to put into your next project.

You also get to realise your gains should you be lucky enough to have made some. 

And arguably, the townhouses look their best when they are brand-new and shiny, so it can be the best time to sell them.

Reasons to Hold

Now let’s talk about reasons to hold your completed townhouses.

selling a townhouse

Firstly, it might make sense to hold due to external market conditions.

If the market is in some correction or downturn, you may not be able to achieve the prices you want to. This can be a good reason to hold.

Another reason you might want to hold is to avoid paying GST and capital gains tax.

By holding, you can start to build out your property portfolio, and there can also be an opportunity to claim depreciation on your new properties.

As you can see, it’s not a black-and-white answer; it will always depend on your and your project’s circumstances. 

Here at Little Fish,  the external property market plays a big part in making these decisions. If it is a poor market, I think it’s great if you can hold and wait for brighter days.

If it’s a good market, it can be great to capitalise on it to realise the gains and roll into your next project with more capital.

Remember, your goal shouldn’t be to retire on one townhouse development project but to build your capital one project at a time.

It may come down to your overall long-term goal. Are you looking to build a kick-ass property portfolio and enjoy market gains when they happen?

Or is it to continue developing and building your capital one project at a time? Only you know the answer to that! If you plan to sell, make sure you learn how to market a new development correctly.

We always recommend seeking advice from anywhere you can.

little fish property developments

And, of course, if you need some assistance, we offer site acquisition and project management services – we’d love to help if there was an opportunity to.