Being a landlord is not just about collecting rental checks every month. Selling a rental property is a essential part of being a landlord. If you want to be a successful landlord, you need to be able to discern when it is time to sell your property. There are several situations where landlords should consider selling their property.
It is a Sellers Market: Hopefully, when originally purchasing any rental property the landlord makes sure they are buying the property at a low price and that over time the property will grow equity and value. Because of the cyclical nature of the housing market, keen landlords can see when and where it makes the most sense to buy a property, rent, improve and eventually sell the rental for a large profit. In fact, when the housing bubble burst in 2007 and became a buyers market, many small-time buyers scooped up foreclosed homes for cheap, rented them out with the goal of eventually selling the rentals . Today the U.S. housing market is considered a sellers’ market, as there is a low inventory of houses and high demand leading to high home prices. Therefore, for many landlords it may be the time to sell some rental properties and reinvest the money in properties that will grow in value over time.
Losing too much money: Even the best rental property investors purchase properties that may not turn out to be very profitable. If the expenses of a certain property are eating the landlord’s monthly profits due to property taxes, mortgage, maintenance cost or very difficult tenants, the landlord may want to consider selling before they lose more money.
Ready to retire or move on: Buying and managing rental properties is a great way to build wealth. But for many people, there may come a time where they are ready to move on from the stress and time commitment of managing rental properties and cash in on the equity in their properties. Selling rental properties can give landlords money towards their retirement or capital to enter a new business
Capital needed for a new property: Successful landlords are always looking to expand and grow their business and acquiring new and better-performing properties is one avenue to reach this goal. However, sometimes those properties require capital that can only be gained by selling one or more rental properties.
Whatever the reason for selling your rental property make sure you follow state and local laws if you currently have tenants living in your rental.
This post is provided by RISSOFT Residential and Commercial Property Management Software, specializing in innovative and cutting-edge property management software for all 50 states. Request a demo or contact us today to receive more information.
Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.