Investing in real estate is a strategic business investment that requires buying, selling, and holding at the right times. Renting a home as a landlord can be a great way to cover the mortgage costs of a property while pocketing a little profit.
However, you should also be aware of when to sell an investment property. Many owners have a hard time deciding when to sell a rental property, mostly because they are used to the monthly income it generates.
It’s nice to have that stream of revenue to depend on, but there are times when selling is more beneficial. Should you keep a rental property or sell it? The following article examines the best times to capitalize off your property. If you’re a landlord, keep reading for tips on when to sell or not sell an investment property.
Should I Sell My Rental Property in 2021?
“Should I sell my rental property now?” The question of when to sell a rental property, especially currently, depends on the region you live in. Knowing when to sell your house based on the rent trends in your area makes all the difference in the world.
For example, currently, in certain cities like Richmond, Virginia, rent prices are higher than ever. This would not be an ideal opportunity to sell your rental property. However, in cities like Manhattan, rent has decreased. This would be an ideal time for when to sell a rental property.
Are there other signs of when you should sell a rental property? Absolutely. The following section answers the question of “when should I sell my rental property?”
Should I Sell a Rental Property: Signs It’s Time to Let a House Go
Use the following list of tips as a guideline of when to sell or keep your rental property.
1. More Trouble to Keep It
A good sign of when to sell a rental property is when being a landlord is more trouble than what it’s worth. Maybe the house is giving you issues that are leading to repairs regularly. It’s possible the taxes have gone up in an area.
Sometimes you just can’t keep good tenants, and you are investing too much work when someone moves out. In these cases, it could be a good sign of when to sell your rental property.
2. Property Values Increased Substantially
If the value of the property is much higher than when you bought it, it is a good sign of when to sell a rental property. If you’ve been keeping a check on the value of your property, and you’ve noticed the value has increased to an abnormally high figure, you should definitely sell.
Pricing for an area goes up and down like a roller coaster. When you see an abnormally high spike, it’s not likely it will hold for a long time. This is one of the best signs of when you should sell a rental property.
3. Your Cash Flow Is Negative
“When should I sell my rental property?” When your cash flow associated with the property becomes negative, it could be time to sell. For whatever reason, sometimes the profit stops coming in like it used to.
This could be because the home is vacant, isn’t fetching the prices it used to, or repairs are too high. Regardless of the cause, when the cash flow becomes negative, the best thing you can do is sell the property.
4. You’re Just Done
Sometimes a good sign of when to sell a rental property is just being done completely. Many landlords get burnt out on taking care of a rental property. The process can be very stressful if you don’t have assistance or tenants become troublesome.
Age can also play a role in when to sell your rental property. It can be difficult for a landlord of senior age to maintain an additional home without help. In these cases, the best thing to do is separate yourself from the property and cash out.
5. High Maintenance Costs
High maintenance fees can be a good indicator of when to sell a rental property. There are more than just the typical “fix-it” fees associated with a home. You also have to factor in things like taxes and other expenses the city might demand.
It’s possible there are also costs for things like bug treatment, landscaping, and several other common needs. When the maintenance fees are becoming too much to deal with, you should definitely sell.
6. A Life Crisis
Experiencing a life crisis is a good sign of when you should sell a rental property. If a family member dies or a close relative falls ill, sometimes maintaining an extra home is out of the question. Staying dedicated to the affairs associated with your rental could be too much to handle.
When important dynamics in your life need attention during an emergency, it could be time to sell. If property values are high during this time, you should definitely take advantage of the opportunity.
7. There Are Better Opportunities
A better opportunity presenting itself is a great answer to the question of “when should I sell my rental property?” Sometimes individuals find another form of income that requires more attention and a larger investment. When these opportunities promise a larger return, it could be a good sign of when to sell a rental property.
If finding someone to maintain the property isn’t possible, you should consider selling. Opportunity only knocks a few times during our lives.
8. You Have Moved
Moving away is a good sign of when to sell your rental property. If you are a remote landlord, the job can become quite difficult.
Managing a property while living a long distance from the area is almost impossible. Knowing when to sell a rental property is important when you no longer live close to the home.
Knowing when you should sell a rental property is vital if you want to see a decent return. If you’re already asking, “when should I sell my rental property?” it means some issues have surfaced that triggered that question.
When this happens, start monitoring the values of the area closer. When the iron is hot, it’s time to strike. The most important part is getting the maximum return on your investment!