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This article was supplied to us by Rhys Trenhaile, he can be reached via his website.
Why is Now a Good Time to Sell Your Large Income Property?
North America has been seeing increasing numbers of large income properties going up for sale across the continent, especially large apartment buildings.
This is also the reason these buildings have hit top dollar.
Capitalization rates have compressed to very low numbers, and in some cities like Toronto and Vancouver those rates of return are down to 1%.
“This seems insane to us”, said agent Greg Miell of The Vanguard Team at Manor Realty Ltd.
“In Windsor we are currently hovering anywhere between a 5.5% to a 6.5% capitalization rate on most buildings,” he adds.
Depending on the circumstances some properties can be found at a slightly lower or higher percentage.
Miell claims this isn’t bad for either party, whether you are the landlord owning it or the buyer trying to buy it.
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“With time you can always increase your capitalization rates as you keep your expenses largely fixed while your rents gradually increase.”
There is one question you should ask yourself, especially if you are getting older in age.
What do you have to gain?
Miell says at some point you should start enjoying your money.
“If you are an owner in your 60s, 70s or older, this is possibly your last super-hot market to sell your property for at least 10 years. And if you wait too long the opportunity is gone to list and sell at a super low capitalization rate, and thus a super high price.”
So, is it a good time to sell your large income property?
According to Miell, the answer to that question is yes.
“It’s time to enjoy some of that money, use it, and realize upon it. It will get much more difficult over the next couple of years as the market begins to cool off and people are no longer willing to buy at those prices per unit.”
For an evaluation of your property contact apartment building specialist Greg Miell of The Vanguard Team at Manor Realty Ltd. (519) 250-8800.
Before You Sell Your Large Income Property
Before you sell off your investment, take the time to consider whether taking the current value of the property is truly worth losing the cash flow. While it can take a lot of stress off of your shoulders, the potential appreciation and cash flow may be worth waiting for.
As well, if you sell your large income property it may come back to bite you in expensive penalties if you still have a mortgage against the property. To discuss your options, click the link below for a free strategy call.