Things to Consider When Selling a Rental Property

by c21commonweath_ldowling 14. November 2019 11:36

Do you own a rental property? You probably considered the investment potential when you bought it, but what if it doesn't pay off as much as you hoped it would?

According to the U.S. Census Bureau, individual investors own nearly 75% of rental properties. Most real estate investors recommend holding onto properties for the long term, but that doesn't make the strategy right for everyone.

When Should I Sell?

Most real estate investors keep their eye on market trends and let the conditions govern their investment strategy. However, when you own a rental property, there are other factors to consider, such as your financial position and maintenance needs. Only you can know if it’s time to sell your rental property, but there are some signs that could drive your decision. Here are five indicators that it may be time to sell:

You've Built Significant Equity

If you've owned your property for a long time or your property has appreciated significantly since you purchased it, you could cash out and pocket your profits. This especially makes sense when you're expecting a downturn in the market.

There Are Other Demands on Your Time

All of us are busy. Whether you have a new job, you're caring for an elderly family member, or you just want to take a long vacation, you may not want to take the time to manage your rental property any longer. Your time is yours, so you should spend it in a way that makes sense for you.

You'd Rather Invest Your Money Somewhere Else

Investing in real estate isn't right for everyone. If you'd rather invest in the stock market, precious metals, or a new business, selling your rental property could free up your capital.

Your Property Needs Extra Maintenance

Depending on your market, managing a rental property can have thin margins. If the time and money you spend on maintenance are becoming too great, it might make sense to sell your property and move on.

Buyer Demand is High

Real estate demand is flexible. If your area is experiencing a boom, selling now could be a great financial move. Like the proverb says, it's best to strike while the iron is hot.

Rental properties can be a lucrative investment, but they may require time and resources you’d rather invest somewhere else. If any of these scenarios seem familiar to you, it may be the right time to sell.