RENTAL NOT PERFORMING? HOW TO KNOW WHEN IT IS TIME FOR A CHANGE? Is your investment property making you money, or has it been a disappointment? Did it used to make money but it’s now older and maintenance costs have increased? Has the neighborhood aged and it is starting to look run down? Is it causing you more work and headaches than it is worth? Here are 5 key factors to decide whether to sell your property or not, and invest in a new one..
- You should know that selling a rental property and buying a different one can have certain tax implications if it is done incorrectly. You can defer the taxes on your investment and have more capital to invest when it is done right with the 1031 exchange. The experts at 1031 Pros can help you maximize your buying power by helping you reduce your taxes. See their website www.my1031pros.com and contact 1031 Pros for more details.
- Selling one property to buy another can be expensive and time consuming so you want to make sure you have carefully weighed the pros and the cons before proceeding. Here is a list of eight questions you can use to help evaluate your investment property to see if it might be worth trading it in for a different one.
- Is the home more than 30 to 40 years old?
- Is the yard overly complicated, time consuming and expensive?
- Do you have a long list of projects or updates that the property needs?
- If you perform a search for comparable rental properties are most of them nicer than yours?
- Does the property seem to be having more repairs or maintenance issues than one would expect?
- Are you constantly attracting low quality tenants?
- Is there anything else about the home you are tired of dealing with that might not be an issue with a different home?
If you answered yes to any one of these items it may not be a reason to make a change, but the more of these questions you answer yes to the more likely it is that you will find a better return with a different property.
- One major pitfall that causes people to stick with a less profitable or difficult to manage property is emotional attachment. Sometimes it’s because it was their own home and they had always planned to keep it as a rental when they moved, or maybe it was inherited from a parent or grandparent and they have great memories there. It’s hard to stray from your plans, especially when you’ve dreamed of it for a long time, but ask yourself what your real goals are. Is your goal to have a good investment, or multiple investments, so you can have a comfortable retirement? Or does your goal center around loving and cherishing a particular property? Don’t put your plan for a certain property above your goal to make money in real estate. If your plan for an investment property needs to be adjusted to reach your goal of making money, then talk to a competent property manager and Realtor and the experts at 1031 Pros. Here is a link to our homepage, https://kasteelproperty.com where we have listed our network of specialists that can help you plan or improve your real estate investment strategy.
- Once you have decided that you might benefit from exchanging your rental for a different one. You will naturally ask yourself, “What type of property should I be looking for?” You don’t want to trade one property in for something that isn’t any better. You want to make sure you are making an upgrade. Watch our short video “What type of rental property should I buy?” There you will learn the valuable information you need to know to purchase a property that will maximize the return on your investment.
