Not all properties are created equal. I used to have the thought that you keep all your properties forever. But over time, working with clients, and developing my own portfolio, I learned that is not always the case. Sometimes, you are better off selling. There are numerous reasons why, but here are three that came to mind after speaking with clients and others alike:
- You might be able to reinvest that money into something that provides better returns. For example, if you own a condo that is yielding $200/month, but you could sell the condo and utilize that money into a multifamily that yields $400/month, then it can be worth it. It’s okay to sell one property if it means the money could be better spent.
- The maintenance is just too much. What if you put in a $500 microwave in a neighborhood where you won’t get a premium for it? If that microwave breaks, it’s going to cost at least $200 just for someone to come and check it out? Is your property totally decked out with tech? That’s a maintenance item if something doesn’t work. One way to look at it is if something needed replacement or fixing, how much profit does that cut into? Or better yet, if a tenant causes damage to the expensive finishes, will their deposit even be enough?
- You just don’t want to be a landlord anymore. The rent control laws can be a lot to handle, dealing with tenants, or if you just want to retire and invest in something more passive. That’s okay. There’s nothing wrong with it, as everyone has different goals.
For whatever your reason is, you must do what’s best for you, and that doesn’t always mean to keep a property as a rental. Sometimes it is just a better to sell.
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