If you own a rental property, one of the biggest questions you will often ask yourself is, “When is the right time to sell it?” You can relax because Raleigh Cary Realty is here to answer that important question and help you decide if it is time.
As a real estate investor, there are many factors to consider; some very personal to your property and situation and some market conditions.
3 key factors to consider when deciding if it is time to sell your real estate investment property are:
- Investment Property Repairs: The main factors to keep in mind about holding onto a rental property start with one simple concept—does it need a lot of repairs? If the answer is yes, and the cost of those repairs and maintaining them becomes too much, it’s time to sell. The reason high repair costs are the first factor is that they lower your net operating income. When your net operating income reduces your profit on the home or it lowers your cap rate, it means you’re not making money on the investment.
- Property Value: This brings us to the next consideration—the property value. If the rental property has either dramatically increased its value (or worse decreased), that is a good indication of a time to sell. A high appreciation means you should make a good profit on the sale, while a depreciation obviously means you’re losing money on the home.
- Tenant Issues: Another reason to consider selling is if you are having constant turnover in tenants. It may mean the area is not desirable for renters, or it has become too costly to rent your home as new properties enter the market and tenants look for lower-priced rentals.
In the end, the key thing to look at is if you are still making a healthy return on the investment. If the answer is no, and the aggravation of maintaining it means it’s no longer worth holding on to the property, then it’s most likely time to sell.
When you’re ready to place your rental property on the market, call us at Raleigh Cary Realty. We’ll list your property and price it right for you.