Friday, December 6, 2019 / by Jo Skipper
When Should I Sell an Investment Property?
No matter how you became a landlord or property owner, the time has come where you are questioning whether or not you should continue ownership of this property. Many people become accidental landlords when they inherit property. Sometimes, this can happen if their home does not sell for what they hope to receive. Others become landlords on purpose with the intent of buying a holding. Whatever the case may be, at some point you are questioning if you should maintain ownership of this investment. Let’s discuss some surefire signs that it is time to sell:
First and foremost, you are no longer making any money. Sure, expenses happen in a home. However, if you find your monthly expenses on this place constantly in the red, then you may want to think about selling this investment. Sometimes a property owner will consider moving back into a property when this happens. They will consider the options of selling the home as-is versus moving in and fixing up the place. If you do some renovations dependent on the initial condition, then you may realize more money in the sale of this property in the long run. Your circumstances in life will determine what your options are. The possibilities are endless with what will work best. If moving into this home is not an option then this is a great time to sell your home even without updates or renovations.
The second indicator of when you may want to consider selling your investment property is when you become a remote landlord. In this instance, you have hired out all responsibilities for this property. All which deduct from your bottom line. Things such as lawn care, management, and maintenance are all deducted from your profits on an ongoing basis. Many times this is hard to stay out of the red after a period of time. Also, once you do make it back to the property it is often in dire need for someone to address the deferred maintenance and can be quite daunting to tackle at this juncture.
Before you do anything, talk to your accountant about any tax implications. Then make a decision. Right now the real estate market is moving at a record pace so the opportunity to sell at a profit is highly likely. Weigh all of the pros and cons with your real estate professional and tax professional before making any hasty moves.