Rental properties can be great investments. But, in some circumstances, they can also be more trouble than they’re worth.
If you have a rental property that you’ve been on the fence about, you may be wondering when it’s best to sell it and start fresh. Here are some telltale signs to look out for.
How do you know when it’s time to sell your rental property and move on to your next adventure? Here are six clues.
It can be difficult to find good tenants, even if you live in a great area with lots of demand for rentals. You can conduct background checks and conduct interviews, but there will almost always be problem tenants that sneak through the cracks.
They won’t pay their rent on time, they’ll cause damage, and/or they won’t follow the rules outlined in your contract — and you’re the one that has to handle those issues.
If you’ve just had one or two problem tenants, and you were able to resolve the issues with ease, you might not be concerned about tossing in the towel and selling your rental property quite yet.
But if you’ve had multiple problems and you just don’t want to deal with the stress anymore, it may be time to pass those troubles to someone else.
Managing a rental property isn’t as easy as it sounds. Depending on how many units you own, it can turn into a full-time job or more. You’re responsible for collecting rent payments each month, sending reminders to anyone who’s late, and handling repairs to the property. Not to mention, many rental property managers get calls late at night or on the weekends that they need to respond to.
For some, this work is doable — even enjoyable. But if you’re dreading every phone call and groaning every time someone’s washing machine won’t work, you might need to take a step back and decide if this is still the job you want.
Many rental property managers think that the value of their property will appreciate over time. While this is true in most cases, it’s assumptive to say this for all properties.
If your rental property is decreasing in value (due to damage, inability to upgrade and upkeep, high property taxes, etc.), you’re losing income. You may want to sell your rental property before its value drops even further, or you’ll be stuck selling it later at an even lower price.
If the cost of repairs is above what you can manage, it’s time to sell your rental property. Unless there’s a strong reason for you to take on a bit of debt for the upkeep, it’s not worth it.
Maintenance should also be something you’re proactive about. Consider both expected and unexpected costs that you’ll pay. You shouldn’t wait for the air conditioning to bust before you sell because then the value of your property will be lower.
You might not quite be ready to be done with investments, but your current rental property isn’t quite cutting it. Perhaps you’ve found a new rental property you’d like to manage, or maybe you’ve found something completely new you’d like to invest in.
Unless you have the time, money, and energy to take on multiple investment opportunities, you may need to move on from your existing one. And in that case, it’s time to sell.
Maybe you want out of the rental property and investment game for whatever reason — major life events, retirement, a slower pace of life, etc. Whatever your situation is, you’re ready to move onto something new. Then you have a no-brainer: it’s time to sell your rental property.
If you can relate to any of the signs listed above, you’re ready to sell your rental property. But then you must follow through on figuring out the best way to do that.
If you need help, check out some of our other blogs on rental property management and selling:
Feeling like you should have sold your rental property, like yesterday? Contact our team at Hometown Development. We’ll provide you with a fair cash offer for it, so you can have it off your hands in as little as five days. No gimmicks and no games — guaranteed.
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