Timing is everything when it comes to selling your rental property. Knowing when to sell is the most important evaluation. Try taking a close look at your property so you can know when the right time is and get it sold so you come out on top.
When your rental property is costing you money, it is probably a good time to sell. It may be costing you more to maintain it than you are bringing in from it. Sometimes the cost of taxes, insurance or even utilities has risen, when before, it was a lucrative piece of property. When it doesn’t look like the loss in money each month will be coming to an end in the near future, selling it may be your only choice.
Ask yourself if you would buy the property today if you were looking around on the real estate market. Look at the neighborhood, the upcoming maintenance issues such as needing a new water heater or a new roof, the cash flow or the vacancy. Is it appreciating? Will rent rise, or continue to stay at the same rate within the area?
Do you feel that your property manager or tenants are doing your investment good, or hindering you from profiting each month? Are you willing to simply cash in on the investment, rather than make money through rent? These are important questions to ask yourself before making a final decision on when to sell your rental property.
It may take time to sell your rental property. It could be weeks or even months before you find a buyer, or even before the sale is officially over. Time could be an issue for you. If you don’t have time to put into the property, it may be beneficial for you to get rid of it. However, consider the financial loss or gain versus the time put into the investment. It may not be worth it, or you may find that it is easier for you to simply sell it and be done. Always remember that passive income is a very easy type of income to make.
Sometimes you may feel that you need to cut your losses. There are times when taking a loss is not quite a bad thing, if it looks as if the market will pick back up. Take a close look at your goals, both long term and short term. If your portfolio is good without it, you may decide to sell. If it is benefiting you financially in the long run, you might want to keep it.
Weighing your pros and cons to selling your rental property may be a good idea if you are uncertain that it is a good time to sell. Looking at your overall situation, the reasons for selling, and your real estate portfolio should be a priority when deciding the outcome of your property.
Many times, real estate investment and rental properties are a risk for the buyer, so it isn’t always a cut and dry situation. Knowing the market, your property, taxes, insurance and vacancy rate is a good idea before you make your final decision to continue to rent or sell your rental property.