Selling My Rental: 6 Clear Indications it is Time to Sell your Rental Property

When does selling my rental make sense?

It is no secret that rental properties can be a great investment avenue. Assuming, of course, you purchased the property below market value and are managing the same properly. It is the ultimate side hustle, bringing in a constant stream of passive income without much input on your side.

But being a landlord also poses its fair share of challenges.

Rent collection, for example, especially where problematic tenants are involved; keeping the property in peak condition, something that can come in a myriad shapes – for example, leaking roof, sewage choke, broken furnace, faulty AC, peeling paintwork, pest issues etc.; there is also the small matter of managing your finances; there are taxes to deal with and so on.

In fact, some of these challenges are the main reason many landlords decide enough is enough and decide to cash in on their rental properties.

For others, the issue of selling my rental could be precipitated by something entirely different.

In this post, we highlight the main telltale signs that now may be the appropriate time to abandon your rental venture and move on. Because sometimes, selling your rental makes more sense that holding on to it.

It’s Not Worth the Hassle

If you are a landlord reading this, then you are very much aware of the commitment it takes to manage a property, double so when there is no property manager involved.

Being a landlord can be tough business, but it is easy to overlook the negative aspects that come with the tag when your rental is bringing in a significant amount each month.

However, when you find playing landlord takes a lot of your time and is a constant cause of chronic stress and anxiety, it is time to evaluate if this is what you want.

You see, owning a rental is not all about the money. If it proves more trouble than it is actually worth, then it is time to consider selling my rental.

Negative Cash Flow has become the Norm

One of the main reasons many of us invest in rental properties is to enjoy the passive monthly income associated with rental properties. So, if you find your rental experiencing negative cash flow problems on a consistent basis, it’s time to rethink the investment.

A negative cash flow could result from several factors. For example, the market rent may have plummeted, or the rising cost of utilities, taxes and insurance could be eating into your profits.

You don’t need to go into panic mode the moment your cash flow dwindles; the key phrase here is consistent negative cash flow. While you may be considering holding on to the investment in the hope things will look up, you also don’t want to be getting holed up a sinking ship.

Since no one can predict the future with certainty, this might be an opportune time for every landlord to start thinking “selling my rental now makes sense”.

As well, if you are contemplating purchasing a rental property, it is advisable to do the math to see the amount of cash flow you are looking at. It pays to be conservative in your estimates to give yourself some wiggle room should you experience cash flow issues.

It makes more Sense channeling the Funds into a more Lucrative Investment

At the heart of it, a rental is an investment just like any other, a place where you pour your funds in the hope of profiting from it.

However, markets can be slow at times, and in such conditions, you may find yourself only making paltry returns. Upon evaluating, you find that you stand to make more money in an alternative investment – a mutual fund, for example, or retirement account, or even a business venture.

In such a case, it makes perfect sense to sell your rental property and put that capital in an alternative investment.

Similarly, you might find yourself in need of the capital, be it for college tuition, medical needs, retirement or to bail yourself out of debt. Pulling out may be in your best interests.

The Maintenance is becoming a Burden

Ask any property owner or manager what the most challenging part of owning a rental property is and most will probably tell you it’s maintenance.

In actual sense, maintenance can have a huge impact on your bottom line, especially if it is something that wasn’t on the cards.

Installing a new HVAC system or replacing a roof that is three decades old can be overwhelming for anyone because we are talking a LOT of money. But some of these things just need to be done because as a landlord, you need to provide a conducive living environment for your tenants while also ensuring the property is at the standard required by regulations and health codes in your area.

If you are a property owner faced with these large repairs but lack the funds to carry them out, it may be wise to just cut your losses and dispose of the property.

The Property is Worth More Than the Initial Cost

Anyone getting into real estate investing does so in the hope that at some point, the value of the property will appreciate. Typically, this involves holding on to the property for a while, much longer in some areas more than others, before this value can considerably amount to anything.

There is no surefire method to guarantee you the best return, otherwise the risk associated with property investing would be minimal. You can sell a house after three years of purchasing it and enjoy a higher appreciation than someone who sells after seven years.

It all depends on various factors, including when you purchased the property, the location you are in, and the current status of the market.

All in all, if it gets to a time when your property is worth more than the price you paid for it, selling my rental is a thought you should seriously consider because you might earn more than you would renting it out since renting is a long-term investment strategy.

It is a Strong Seller’s Market

Real estate markets are subject to fluctuation from year to year, and in some cases, month to month. There are a lot of economic factors underlying this up-and-down price movement and it is upon you to determine the best time to capitalize.

If you are intent on selling your rental, it is good to do so when the market is on your side as you are assured a better price. One way to determine this is to consult a reputable local real estate professional. A person who deeply understands your market and can guide you on when the ideal time to sell your rental might be.

If after consulting your local agent and the market seems to skew in the seller’s favor (seller’s market) this could be an opportune time to sell.

Conclusion

Selling a property, rental or otherwise, is not as easy as it may come across. Given the volatility of the housing market, it can also be a risky undertaking.

Fortunately, there is a silver lining in it all.

Cash buyers like us provide one of the easiest ways to sell your rental property when you finally make up your mind that you need to offload the property.

The good thing with cash buyers is that you don’t have to wait for the market to skew in your favor; a good deal of the time, you may not even have the luxury to wait.

You also don’t have to pay any professional to let you in on the current status of the market – you already have a ready buyer; a buyer who is prepared to offer you top dollar for your investment.

Cash buyers also buy properties in an “as-is” condition, freeing you from the need to carry out repairs, including the major ones which require a huge financial investment.

If you find yourself thinking “I should be selling my rental” at some point, feel free to get in touch with us on 469-858-0088 to discuss your needs.

 

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