Signs it might be time to sell your rental property
If you’re a landlord managing a rental property, you understand that it can be a lot of work. From dealing with tenants to screening new applicants, there’s a lot more to being a landlord than meets the eye. Plus, when repairs come around—either from tenant misuse or otherwise—you’re the one who has to foot the bill. While there are many reasons to hold onto your rental property, here are a few factors that might contribute to a decision to sell.
You don’t want to manage the property from out of town
One of the most common reasons you might want to sell your rental property is because you’re moving out of state and don’t want to be managing it from afar. While property management software solutions make things like tenant screening and collecting rent relatively easy, addressing any repairs or other issues from another city can be challenging. Most landlords want to make sure that they’re able to check in on a property periodically, and if you aren’t a convenient distance from your property anymore or don’t plan on coming back to town at least quarterly, it might be time to sell your rental property.
You aren’t getting the best returns
Another reason you may be interested in selling your rental property is if you’re no longer getting the same returns from it that you used to. This is especially common if your apartment building or home is in an area that isn’t as desirable as it once was, or if property taxes have increased on the unit. Not all rental markets are created equally when it comes to geography, average home prices, and job growth. Supply may also be up, or interest rates may be down, meaning that tenants have more to choose from, or might even be purchasing instead of renting. In these cases, it might be best to sell your rental property rather than hope for a major economic shift that would possibly allow you to recoup your losses.
You need the money
At its heart, your rental property is an investment. Since you likely have a significant amount of capital tied up in your unit, there may come a time when you need to cash in. Whether you are facing a family or medical emergency, or just hoping to pay off your children’s college tuition, there’s no shame in putting your rental property on the market. Regardless of how much you love being a landlord, you’ll be grateful for making the more responsible decision.
The property is too much work
Especially with older buildings, sometimes the property is just no longer worth the hassle to maintain. Not every property can be equipped with weather-tight Everdrain roofing, and in some cases, electrical wiring or structural issues can cost thousands of dollars in renovations and repairs. If you feel like your property is taking up too much time, energy, and money to stay up to code, then it may be worth considering selling your building instead of continuing to hemorrhage resources.
You’re no longer interested in being a landlord
There may come a time when you are no longer be interested in being a landlord. Whether you’re switching to a new field, getting older and thinking about retiring, or just growing tired of dealing with tenants, it’s totally respectable to want to end your career in property management. In such situations, you’ll likely want to sell the property to another management company, so as not to displace your current tenants. If you’re thinking of moving into a different industry, it’s important to remember that many of the skills you’ve gained as a landlord are transferable to other lines of work. In the end, the money from your investment will be a help, too, allowing you to take your time searching for a new career.
Being a landlord is rewarding work. That said, there definitely comes a time when it makes more sense to sell your property than to keep it. If you identify with any of the above situations, it is worth considering whether or not you should sell your rental property.