Whether you’ve owned your rental property for 10 years or 10 months, every investor wonders if or when should they sell a rental property.
Do you have a portfolio of multiple properties and there seems to be one that is always a headache?
Are you an “accidental landlord” that never intended to own and manage a rental property?
Have you seen the reports about your local market increasing in price and sales activity?
Do you own multiple properties and have an opportunity where you would like to invest the funds you have tied up in these properties?
Any or all of these are good reasons to explore the possibility of selling a rental property.
3 big things to consider:
1. What is your Long-Term plan?
Did you buy this property to supplement retirement income or as an active investment? If you got into investment real estate for the long term, then you may want to consider if your early exit is a knee-jerk reaction to a current situation, or might this be the time to consider selling.
2. Do you have a specific purpose that you are allocating your rental funds to cover?
Some of our investor clients are using a piece of paid for real estate to fund their childrens’college expenses, or to save for their grandkids.
Some of our clients have rental houses that will pay off in 5-10 years and they are planning to use the debt free future rental income to fund their retirement.
If you have a specific purpose or goal with your rental properties, do you have a source of replacement income to fund that current or future need?
3. If you decide to sell, who is your end buyer?
Are you planning to bring the house up to current move-in ready condition for a homeowner buyer? For example, would $5,000-10,000 in upgrades bring in offers of $10,000-20,000 higher?
Or, would you be better served to sell as-is to another investor. Typically, other investors will buy “as-is” and will close quickly, but they will usually offer a lower price.
These may be easy questions to answer and may lead to a quick and easy decision.
On the other hand, they may lead to more questions with more complex consequences.
Reed & Associates is here to help. We are a full service residential real estate brokerage. We work with investors, buyers, sellers and tenants to purchase, lease, renovate, manage and maintain their residential investment properties.