Real estate is a common investment option. People, with an expectation of solid returns, often invest in real estate to rent the Property out. Agents such as real estate agents Miami Fl with a grand reputation and goodwill in the community are exceptionally careful with their client’s trust.
A trick question here is - till how long should you keep enjoying the apparent benefits of a rental property?Have you ever noticed any problem develop with your garage door in your home or business? Has your rental property been giving you a tough time of late? Are you planning to shift sometime soon and rent out your old home? Or, is your rental property solving some of your most critical financial needs and the rent you get from it plays a key role in the allocation of your funds? Whether your rental piece of property is a boon or a bane can’t be decided just like that. A lot of parameters need to be analyzed before drawing any suitable conclusion. Some of the key factors have been discussed as under -
- RESPONSIBILITY - One of the most common reasons that people have for selling their rental property is the responsibility that comes with it. It becomes overwhelming sometimes to take time out from your busy schedule to take care of the property. So, if your rental property has also become a reason for constant mental fatigue and is doing you more harm than good, then it may be a high time that you consider selling it at a decent cost.
- NEED FOR MONEY - Another ground on which you may sell your rental property can be that you are in a strict need of funds. Your rental property can fetch you a handsome amount in case you urgently want some bucks. You always have the option to buy another suitable piece once you have stabilized financially, but rather than getting drowned in loans at hefty interest rates, you should consider selling your rental property for settling some urgent dues.
- HIGH MAINTENANCE COST - Rental properties are not easy to maintain. Today the piece may look all good and classy, tomorrow it may need maintenance, get outdated, or the garage door may start making weird sounds. The condition, age, size and the type of property decide how much or how low the cost turns out to be. It varies from property to property and can’t be estimated objectively. If you feel that the maintenance costs are a little too much to bear, then yeah, you should sell your property and invest in something with better returns.
- LONG-TERM PLANS - Another important parameter that decides whether it is the right time to sell your rental property or not is your intentions with it back when you bought it. Your long-term plans in life play an important role in your investment schemes and agendas. If you bought this property as something to supplement your retirement income, then it is better to keep it rather than selling it as a knee-jerk reaction to a minor financial crisis.
- BETTER ASSETS AVAILABLE - The grass always seems greener on the other side, sometimes it actually is! Maybe you have better investment options available at your disposal. In that case, it doesn’t make much sense in sticking to the age-old idea of investing in rentals and real estate. It is all about profit and returns on investment in the end. If you are getting better deals - in real estate or otherwise - then you must go for it.
- POOR PERFORMANCE - Rental properties can tie up a considerable amount of capital and equity. Costs in the form of deposits to avoid insurance, one-time costs when you buy a new property and the ongoing maintenance costs are often too much to invest in something that doesn’t offer expected returns. You may consider selling your rental property if it is not offering the expected returns and has been performing poorly for a last few months or years. If the yield (rent - in case of investment properties) and the capital growth are not satisfactory, then it doesn’t make much sense in sticking to the property.
- RECENTLY BOUGHT - A good reason to hold onto your rental property can be that it was bought just recently and needs time to return the favor. If you have bought the piece four or five years ago, then it is advisable to stick to it for another three to four years. Another reason is that going in and getting out of a property deal can be a time, energy and money consuming activity. The short-term gain may seem tempting enough but it can cost you in the long run heavily. Rather than regretting the abrupt decision later, it is better to wait for the right time.
- DECENT PERFORMANCE - If your property is performing decently in the rental market and returning you some decent bucks, then why on Earth would you want to sell it? A constant passive source of income is not bad at all. If the yield (greater than 5%) and the capital growth are great, then you must not even think about selling your property doesn't matter how hot the market is. With increasing population and dwindling resources, the market is expected to get even hotter in the near future. Rather than playing foolishly with this well-invested money, giving you solid returns, you should consider investing the profits gained somewhere.
- HIGH POTENTIAL FOR GROWTH - Another reason to stick to your investment property is that the piece has a high potential for growth. If the graph is expected to go higher with time, then it would be a foolish idea to sell your property at whatever-you-get prices. A pro tip here is to balance your growth expectations with the timing of the sale. Decisions such as selling or buying a piece of property must not be taken with short-term goals in mind.
- A BACKUP PLAN FOR RETIREMENT - If your rental property is a key part of your financial strategy and holds the potential of supplementing your family income post your retirement, then you must think twice before selling it. It may look like a liability or a headache today but can become an asset once it becomes the only source of income for you. If you are not facing any financial crisis as of now and don’t have any better sources of passive income with such a high potential for growth, then it is not advisable to sell your rentals.
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