Know when to hold 'em: The assets you should avoid selling and why long-term gains matter

Even when logic is screaming at you to ‘Sell! Sell! Sell!’ there are some assets that are strategically untouchable, and should never be let go.

Chief among these are residential or commercial properties that can’t be replaced, says Victor Kumar from Right Property Group. That might be a Toorak riverfront mansion, an exquisite Annandale terrace or a multi-tenanted commercial space that’s giving you back far more than you’re putting in.

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“These are all generational assets that are very hard to replace,” Kumar says. “You’d only really sell ones like these if they were becoming run-down and costing a lot in maintenance or if you were asset-rich but cash-poor. They’ll eventually provide a nest egg for your retirement or for your kids’ inheritance.

“Also, anything that has a low loan-to-value ratio and is going up in value will always remain positive. If you are going to sell, it might be better to sell within your portfolio, moving something into a trust fund or super fund, for tax purposes.”

Real Estate Buyers Agents Association of Australia president Melinda Jennison agrees that scarce properties should never be offloaded until the last possible moment, or until their value is maximised.

That could be a house with an uninterrupted view of the beach, or something with unbeatable character, or even a house and land in an area with future development potential.

“It could also be something in an area with a low turnover rate, so if you sell, it won’t be easy to buy back in,” Jennison says. “If it’s a property in a good neighbourhood, with a great demographic, an excellent orientation and quality schools, if you can hold it, you should.

“There’s no guarantee that anything will increase in value, but with a decent economy and historically strong demand, you’d expect the best assets to continue lifting in value.”

Similarly, old houses on big blocks of land hold a lot of promise for the future, believes Abdullah Nouh, the founder of Mecca Property Group.

There’s always potential for the land to be rezoned for low, medium or high-density housing, so owners should hang on until the developers move in.

“You can always increase the value of those properties in the meantime, too,” Nouh says. “There’s often the potential to build another house on the same block to add value. Commercial assets, like big-form commercial retail and commercial warehousing, also bring in a good income over time.

“And anything in a really good location – after all, location carries 80 per cent of the weight of price growth – I wouldn’t sell, either.”

Sometimes, people sniff the headwinds of change and sell too quickly. There are some, for instance, who predicted petrol stations would fall out of favour as the popularity of EVs continued to grow.

“But people will always need petrol stations,” Kumar says. “Besides, with commercial properties, you never set and forget. You need to monitor their pulse and keep them up to date.

“For instance, most now also offer EV charging and some make more money on selling coffee than they do selling petrol.”