Investing in real estate is all about maximizing your profit. If you’re a landlord, you’ve probably enjoyed a passive income for some time. However, holding onto a rental property for too long can come with risk. But how can you tell it’s the right time to sell your rental property?
1. Being a Landlord Is More Trouble Than It’s Worth
As a landlord, you are likely very familiar with the day-in-day-out requirements of managing a property. Since emergency maintenance calls don’t exactly abide by business hours, you need to be ready to answer your phone at all times, and this can take a toll.
Did you hear the one about the landlord, the tenant involved in hard-core drugs, and a raid by the FBI? Or how about the cat lady who moved out without notice but left her cats behind — and unattended — for three weeks?
The horror stories go on. If you’ve been a landlord long enough, you have plenty of your own.
Landlord aggravations aren’t limited to tenants, of course. There are maintenance issues to fret over, fluctuating values, even natural disasters such as earthquakes and floods. If the stress isn’t equal to the revenue, it might just be time to wave goodbye.
After years of enjoying being a landlord, that’s where one HomeGo customer found herself.
“It was fun for a while…but I did want to get rid of it quickly in as-is condition. You guys came back fast. Then you set the appointment to come out to the house and the agent I talked to was very good. He wanted to help me sell the place quickly, without having to make repairs, and get a good price for it.”
If you no longer want the stress of maintaining a proper living space for your tenants, or you are tired of dealing with difficult renters, you could have reached your limit. It’s understandable, being a landlord of a rental property is a significant undertaking. If you are no longer enthusiastic about your landlord responsibilities, you will likely feel much better if you sell your property.
2. Your Property Is Now Worth More Than When You Bought It
As far as real estate investment goes, the name of the game is ensuring property appreciation. If you have successfully flipped your property and it is now worth more than the price you bought it for, selling could earn more than renting.
3. You No Longer See a Positive Cash Flow
If you are losing money each month you might need to reevaluate the situation. There are many reasons your cash flow could be dwindling, and it’s not necessarily always anyone’s fault. The cost of taxes, utilities, and insurance may have risen, market rents may have dropped, or both.
You didn’t become a landlord for the glory and exciting lifestyle. You became a landlord in order to generate income. It’s a numbers game. Earn more than you spend and you’re winning. Spend more than you earn and you’re losing.
Admitting it’s time to sell your investment property fast can be difficult. It can feel like a greater defeat than being in the red each month. But there’s a simple question to ask yourself that removes all emotion from the equation. As The Washington Post puts it:
The test for you is to think about whether you’d buy the investment now. … Investors have a tendency to keep bad assets for too long, hoping that they’ll turn around. But if you wouldn’t buy this investment today, then you should dump it.
Now factor in capital gain taxes (which can reach about 22% of the selling price), the prospect of making any necessary repairs, and staring at a negative cash flow for who knows how much longer. After all that, you might discover that your balance sheet has made the decision for you.
4. You’re Ready to Move On
Things change. Maybe it’s time for a new scenery or you have another opportunity calling your name. No matter your reason for being a landlord, it’s your right to do what is best for yourself. If you’ve decided to make a change in your life and being a landlord is not part of your plan, selling your rental property is a logical solution.
Sometimes, something new comes along and you simply feel it’s time to move on. Nothing about bad tenants, bothersome maintenance, or anything of the sort. Maybe your eBay store is turning a nice profit, or your stock investments are performing well.
There’s another possibility, as well. Selling a rental property can include a fair amount of downsides: repairs, dealing with a steady stream of potential buyers (or just “lookie-loos”), and similar irritations. Do you have the time or stamina to deal with it all?
One HomeGo customer didn’t, which is why he sold his rental properties the easy way.
“My health had taken a turn for the worse. I lost my kidneys and bladder. We actually had two other homes as well. I sold all three of them because I just didn’t have the wherewithal to continue to try to take care of my own properties. HomeGo appealed to me mainly because of my health. My health went really quickly, and I didn’t know if I was going to recover or not. I didn’t feel like I could leave my wife saddled with the rent houses. I needed a quick turnaround.”
5. You Can No Longer Afford the Maintenance
Let’s face it, the cost associated with properly maintaining a rental property can get expensive. As a landlord, you need to be sure the property is habitable for your tenants and is up to par with health codes and regulations. While some repairs can be chalked up to DIY projects, others can cause quite a hit on your bank account. If you are finding it difficult to fund costly repairs or to maintain your to-do list, selling can be the answer.
6. You Can Read the Writing on the Wall
This isn’t your first rodeo with rental properties and troublesome tenants. Even if your numbers are currently good, you understand they won’t always look good. Seller’s markets have a shelf life, after all. Millennials driving today’s hot markets will eventually cool off a bit. Job growth in your area may already be teetering on the edge of a bad fall.
As Kenny Rogers explained, “you’ve got to know when to hold ‘em and know when to fold ‘em.” If you’re wondering when you should sell your rental property, even the Gambler would agree that cashing out of your rental property during the most profitable seller’s market since 2007 is as good a time as any.
The Best, and Easiest Way to Sell Your Rental Property
Usually, it’s essential to get the timing of your sale perfect. Whether or not you make a profit can depend on the fickle nature of the market.
Luckily, with HomeGo, you don’t have to pay any mind to the current status of the market. You can sell your rental property to a guaranteed buyer and still receive the highest amount of cash. HomeGo specifically buys properties as-is, regardless of condition. This is great if you can no longer properly maintain the repairs of your property.
HomeGo does not require you to make any repairs on your property. There’s no paperwork to get an offer for your rental. If you’re curious what your rental property can earn with HomeGo, find out here.