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If you own a rental property, there’s a good chance you put a lot of time and money into it. Giving up on an investment is difficult, especially if you’ve been working on it for many years. With that said, it’s important to know when to sell your property and move on.
There are many reasons one might want to move on from a particular rental property, including the need to simply try something new. Your property might also not be making as much profit as you’d hoped. It’s not all bad, however: if you’re ready for retirement, deciding to sell your property could add some quick cash to that retirement fund.
Spend some time making your decision, as it’s a big one. To help decide whether it’s time, read about common signs that it might be time to move on.
But first, before you decide to sell your property, it is important to talk to a mortgage expert to ensure that any outstanding loans or lines of credit on the property are properly cared for. That way once you sell your property, you can move on without looking back. To get started today, click the link below for a free strategy call.
Sign One: Your property is making little to no profit
One of the biggest reasons one might decide to move on from an investment is that it isn’t turning a profit. Investments can take some time before showing a profit. If you’ve been in the negative for a while, however, it’s probably best to move on. A consistent negative cash flow will take a toll on your savings, thus preventing you from making better investments in the future.
It’s possible that you just need to re-evaluate your rental property and figure out how to increase profits. If you’re having trouble finding tenants, for example, your property might need better marketing or simple amenities.
Sign Two: Running the property leaves you little free time
You don’t want to spend all your time taking care of issues with your rental property. This can lead to higher stress levels, which is terrible for your mental health. Dealing with tenants’ problems, making repairs, providing maintenance and all the other things it takes to successfully run a rental property can easily eat up your time. It’s important for everyone to enjoy free time every now and again—even landlords. If your rental property is preventing this free time, it’s usually better to sell your property instead of trying to stick it out.
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Sign Three: The property needs expensive repairs
As a building become older, it may need more and more repairs. These repairs can add up and cause a major loss in profits. It’s usually not best to stick with a rental property that needs one repair after another. Consider having a reputable contactor check your building for any problems that may arise in the future. Even if you’ve owned the building for a long time, it’s good to consider other options if renovations and repairs are too expensive.
Sign Four: You’ve found a better investment opportunity elsewhere
New and better investments pop up all the time. If you’re ready to take a risk on a new property in hopes of making higher profits, consider selling your property. It’s important to decide whether the potential of higher profits is worth giving up on an investment you’ve already put work into. This is especially true if your current rental property is making a good profit.
Sometimes, people just need a change. As mentioned earlier, running a rental property is hard work. You’re usually working on it almost every day, and that can wear a person down after a while. You might, instead, decide to purchase a piece of property to renovate then sell.
After selling the property, you’ll have a pocket full of cash and won’t have to worry about continuously maintaining a property or paying for repairs. Different types of investment require different strategies, though, so be sure to know what you’re getting into.
Sign Five: The area around your rental property has changed
People can sometimes lose interest in an area that was once trendy. This might be because nearby businesses have closed or there’s been an increase of crime in the area. Either way, disinterest in a certain area of town might mean that you’re losing tenants left and right.
Consider moving on if there’s been a noticeable change in your rental property’s neighbourhood. The value of your property can quickly lower if the neighbourhood’s popularity has dropped, so you may even want to get out as soon as possible.
You can avoid making this mistake in the first place by doing thorough research on the neighbourhood before investing. See if the market in that area continuously fluctuates or seems to stay stable. A good real estate agent can also help you determine if it’s worth investing in a particular area.
How to sell your property
Once you’ve made the decision to sell your property, it’s time to develop a good strategy. Getting a good price for your property could take some time, so being patient is important. Be sure to also let your tenants know that you’ve decided to sell your property and give them a reasonable amount of time to find somewhere new. Sometimes, a tenant might even be interested in buying the property.
Finding a good real estate agent is another important part of the selling process. Your real estate agent will have the best advice when it comes to preparing the property for possible buyers—or if you should hang on a bit longer. They can also set up showings and help with the marketing of your property. With your real estate agent, do research on the market in your area and decide on a good asking price.
If you plan to sell, ensure your property is looking tip-top before showing it to potential buyers. This means cleaning all the rooms and doing some landscaping. It’s good to also take care of any repairs that you may have been avoiding. Don’t give buyers any reason to not fall in love with your rental property!
Deciding to sell your property might be tough, but you have to do what’s best for your future. Don’t let your rental property stand in the way of you spending time with your family, making better investments or retiring.
Once again, before you decide to sell your property, it is important to talk to a mortgage expert to ensure that any outstanding loans or lines of credit on the property are properly cared for. That way once you sell your property, you can move on without looking back. To get started today, click the link below for a free strategy call.