Owning rental property can be a greatboost to your income. However, you can’t keep it forever. Knowing when to sell rental property is a question all real estate investors want the answer to.
While no one has a crystal ball that can tell you exactly when you should sell, there are some reliable market signs that indicate when the ideal time to sell could be. There are also some signs that point towards keeping your rental property.
Let’s explore those signs so you can find out whether the time is right for you to sell your rental property.
7 Signs You Should Sell Your Rental Property
Here in California, the real estate market can be a wild ride. If you own rental property in California, it can either be a great money maker or cause you daily stress.
If you’re considering your rental real estate options, here are 7 signs to help you decide if you should sell your rental property.
1. It’s a “Sellers Market”
“Should I sell my rental in 2022?” If you are asking yourself this question, the signs are currently pointing towards yes. We are in a good seller’s market. This means, the demand for houses exceeds the supply and there are more interested buyers than there are houses for sale.
When this happens, houses tend to sell quickly and at higher prices than usual. Sellers can raise their asking price. Frequently, there are multiple interested parties in one house, which can cause a bidding war and sometimes houses sell for more than the initial asking price.
Because of the high interest, buyers lose a lot of their negotiating powers and are more willing to buy properties as-is.
However, even when the market is in your favor, you should avoid setting your asking price too high. A price that is at or slightly below the market price, could encourage a bidding war as opposed to a high-priced house that pushes away potential buyers.
You also need to consider offers carefully. Just because a buyer gives you the highest offer, that does not mean they have the financial strength to follow through. Check to see if buyers are pre-approved before accepting an offer.
2. Not Enough Liquid Cash
With the rising value of properties in California, owning a rental property is a great way to bring in some extra cash, especially when it comes time to sell. If you find yourself strapped for liquid cash, selling your rental property can turn your hard-earned equity into cash on hand.
This is especially true if you sell your property to a real estate investment company like SoCal Home Buyers. Companies like this can give you a cash offer and work with your schedule when it comes to closing. This means, the sooner you want to close, the sooner you get paid.
3. You’re Not Thrilled About Being a Landlord
you first put your property up for rent, maybe you imagined being a landlord would be as simple as someone paying you rent each month, while you earned a small profit. However, being a landlord can be stressful, time-consuming, and expensive.
Dealing with tenant issues and property management can be a lot more demanding than most people realize.
If you recognize that you are not cut out to be a landlord, it is time to sell your property. While
selling a rental with tenants can be more complicated, many times, real estate investment companies can take over your occupied properties without any problems.
An example of this would be if you sold stock and gained $50,000, you could sell a rental property for a loss of $50,000. This would set your capital gains tax to $0.
4. It’s Not a Good Rental Property
While being a landlord is challenging no matter what, having the right rental can make all the difference. A good rental that is easy to maintain, easy to rent, and consistently has good tenants is going to be much easier on you than a rental that constantly has maintenance issues, is hard to fill, and attracts bad tenants.
There are various factors that contribute to the overall quality of a rental property.
If you have a bad rental that is causing you difficulty and costing you money, it is time to sell
5. The Age of the Property Comes with High Maintenance Costs
In general, the older a property is, the more maintenance it will need. That maintenance is not free. If you have an aging property that is quickly draining your maintenance budget, sell it now before it gets worse.
Many real estate investment companies will purchase older properties, even with existing problems, and pay you cash.
Stressed about selling your rental?
Selling a rental in California can be stressful especially with uncooperative tenants. If you want to sell without the stress, hassle and headache of listing, Realtors and dealing with Tenants we can help!
Receive a guaranteed all cash offer within 48 hours and close on your home within 7 days. You may be one click away from your next business venture.
6. You Want to Use the Equity You’ve Built
Another good reason to sell your rental property is to use the equity you’ve built for something else.
Have you ever wondered when to sell your rental property in retirement?
If so, a boost of equity from the sale could give the freedom to enjoy life more, take a
vacation, or even make some new investments.
Some people sell property and then use that equity to invest in a better property with more profit potential. Whatever the reason, you can sell your rental so you can put that equity to good use. If speed is of importance, you can sell your property quickly and get a cash offer from SoCal Home Buyers.
7. Rent Costs Don’t Match the Homes Value
As communities change over time, property values fluctuate. This can cause rent prices to rise and fall, too. If you are having difficulty finding tenants who are willing to pay the rent that matches the value of the home, it might be time to sell the property. This can free up your equity and let you find a better rental property.
5 Signs You Should Keep Your Rental Property
With real estate in California, it can be hard to know what to expect. While housing costs are typically high, there can be wild fluctuations that always keep you guessing.
If you are debating selling your rental in 2022, here are 5 signs that you should keep your rental property.
1. Your House Has Attractive Rental Amenities
The best rental properties have attractive amenities that keep the renters coming. Tenants love features that make their lives easier and more comfortable. If your property has some of
these attractive amenities, you should consider keeping it:
With any of these features you should have no problem attracting good tenants, keeping them, and charging higher rent.
2. You’ve Always Aspired to Own Rental Property
Being a real estate investor is not the right choice for everyone. Some people don’t realize how much work it really is. However, you have dreamed of owning rental property for years,
right?
Now, that the opportunity is here, you are excited and ready to put in the work. If someone has been pressuring you to sell your property because of the current market conditions, don’t give in.
Enjoy your real estate adventure while you can.
3. There’s High Demand for Rentals in Your Area
If your rental property is in an area with a high demand, it does not make sense to sell your property. You are in a prime position to charge a higher rent and still get a steady of flow of
tenants.
Southern California has a lot of high demand areas. If you’re not sure if your property is in a high demand area, consider the following factors:
4. There’s Plenty of Room for Profit
Perhapsyou bought your rental property a couple of years ago and now you are seeing the effects of a booming housing market. With home and rent prices on the rise, you should have plenty of room to make a profit. If you bought the property at an affordable price, you now have the flexibility to increase the rent prices and make more money.
5. You’re Personally Attached to the House
One reason for keeping a property is a personal connection. This hard-to-quantify value might seem frivolous and impractical to some, but for others, it holds major importance.
If you have a deep personal connection to your rental property, it is okay to keep it. Perhaps it was the house you grew up in or the house where you raised your children.
You might not live there anymore, but you still get the satisfaction of it being in your life. If you can’t bear to part ways with a beloved piece of your life, then you can keep it as long as you want.
Stressed about selling your rental?
Selling a rental in California can be stressful especially with uncooperative tenants. If you want to sell without the stress, hassle and headache of listing, Realtors and dealing with Tenants we can help!
Receive a guaranteed all cash offer within 48 hours and close on your home within 7 days. You may be one click away from your next business venture.
Renting vs. Selling a House
While a rental property can give you a steady stream of income, it can also bring a steady stream of maintenance costs. Looking for new tenants often feels like playing a game of poker – you never know what kind of people you will get. While some tenants are perfect and
always pay their rent on time, others come with monthly hassles.
The location of your house also plays a big part in determining whether it is best to sell it outright or put it up for rent. If there is high demand for rental properties, you could stand to
make a decent profit.
However, if there are few renters in your area, the house could sit empty for a few months and cost you thousands.
Consider what kind of market it is. If we are still in a seller’s market, it makes sense to sell. However, in a buyer’s market, it could be more beneficial to keep renting your property.
Keeping a rental property lets you build equity with a dependable stream of income, whereas selling your property lets you put your equity to work somewhere else. You can also try using a keep or sell rental property calculator. These tools give you a good estimate of your profit potential.
In the end, you will have to weigh your personal pros and cons of selling a rental property to determine what choice best meets your needs.
