Rental Property Quandary—When to Sell!
But if—and then when—to sell a rental property can be a tough call. As a relatively ill-liquid investment, it takes a great deal more commitment than the decision to sell a stock or cash in a bond. But sometimes there are circumstances that can make the decision a little easier. For instance:
One clear reason why you might choose to sell is if the rental property is losing money. The rental may have been vacant for too long, or the rent level may not have been sufficient to cover expenses. In many cases, other real estate investors will be willing to lose money in the short term on a property they believe will appreciate in the future. It’s also possible that a full-time rental property professional may be able to tap economies of scale that are not possible for every individual investor.
Your rental property may be doing fine—making money and showing substantial value growth—but now an unusually promising alternative investment has appeared. With the strong spring market, it may make sense to sell now to reinvest the profits elsewhere.
Everyone’s tax situation is different, and the tax environment is subject to change. Even if that weren’t the case, there are some years when personal finances mean that a sale would be a much better idea than others. As with any substantial financial decision, your accountant or other financial adviser will have the relevant input.
Being a landlord is not for everyone. Sometimes a professional property manager can alleviate nearly all the stress for an investor who doesn’t relish the vocation, but even then, there can be other chores: bookkeeping, manager management, a leak-through of tenant personality issues…that prompt a landlord to decide he or she would rather direct energy elsewhere. Opting for more passive forms of investment is always a possibility.
Desoto County has already benefited from some of the fruits of the national real estate recovery – but that alone doesn’t answer whether this spring is an opportune time for you to consider selling your rental property. Call me today for a comprehensive property evaluation—the key piece of information that will help you decide!