“Hi Yuko, I would like to sell my condominium located in Bancho* now, what do you think?”
One of my clients asked me.
“Well, now the market has been booming and it’s a good timing to sell. For another several percent, you may be able to expect the price increase but you are not sure how much efforts you would put to realize such value. Thus, if you want to sell now, I think it’s the right decision.”
“Should I hold more…? To further price increase?”
“Well, now the residential condo you have has 18 years old, the dramatic price increase would appear in re-development phase. Please pay attention how much total units your condo building has. This would affect how much challenging the redevelopment would be…. Well, the location is Teppan** -prime of the prime-anyway, so you would not suffer from huge price drop from holding that. If you expect the large capital gain come from the redevelopment, you may be able to hold, it would be realized in say, 30 years though. Now you can just sell the asset and hold the cash to invest in that Teppan location in next market downturn.”
“Yeah, not so large number of units, I think. Ok, I will think about the exit…”
The point is having prime asset in prime location secures you good return over the long term. In the timing right now, say before the market peak out, you may consider securing your cash for the future investment.
* Bancho, the high end residential area in the central Tokyo, used to be a noble aristocratic residentials in Edo period, then turned into luxury residential area in Tokyo.
* Teppan, is a casual Japanese word, meaning iron plate, super strong position of a good and service, or even event. Eg, Kiyomizu temple is Teppan tourist destination in Kyoto.
