Should You Sell My Rental Property?
As a landlord, you’re not only a property owner, you are also a business owner. There are endless responsibilities that come alongside the income and there may come a time when you ask yourself, “Should I sell my rental property?”
To answer your question, you will want to understand the process and a few key factors:
- Repair costs
- Tenant turnover rate
- Market rent
- Property management
If owning a rental property is no longer desirable or the difficulties seem to be outweighing the profits, it may be time to ask yourself, if you should sell it?
Five Determining Factors:
As a property owner, your taxes can be quite high. If you’re considering selling your rental property, get an evaluation of your taxes first. After you receive the evaluation, try to find alternative ways to reduce any future taxes.
Note: It is possible for the taxation on the property to be lowered if an assessment of the property shows that the home is worth a lower value. Taxes are important to your decision of should I sell my property because if your taxes are strongly affecting your annual profits, you may want to sell.
2. Repair Costs
The more tenants in your rental property over the years, the more repair costs you might incur. Before becoming a landlord you may have budgeted for the normal wear and tear of the house including things like if the pipes break, the roof deteriorates, etc. Repair costs are unfortunately inevitable over time. But, if you’re paying over your estimated threshold of repair costs annually and it is affecting your profitability, you may want to consider answering yes to the questions of should I sell my rental property.
3. Tenant Turnover Rate
If you have a high turnover rate, it may be negatively affecting your rental property. A high turnover can cause you to lose credibility and fail to get good tenants. If you are in a situation where you have a high turnover then it may be time to consider selling your rental property.
4. Market Rent
If you are having a hard time making a profit or failing to get tenants due to the cost of your property, you will want to do a market evaluation. You will need to do an evaluation of rental prices for properties similar to yours against your asking price.
This evaluation will help you understand what is a reasonable market related price to offer your tenants. If the results are the same and your profits continue to decrease, this may be a good time to consider answering yes to should I sell my rental property.
5. Property Management
The responsibilities of being a landlord can be overwhelming and time consuming. If the responsibilities aren’t fulfilled and in a timely manner, you may risk losing business. If that is the case, you might consider hiring a professional property manager. If you need to but cannot afford to hire a professional property manager, it may be time to sell your property.
There you have it, the five main factors to consider when trying to decide the answer to “Should I sell my rental property?” There are other factors to consider that can be personalized to each situation, but we hope that these gave you a good start.
If you’re like many, you may ultimately decide it is time to sell your property! If that sounds like you and you’re thinking, “Hey, I need to sell my house fast ,” you’re in luck!