How to Decide When to Stop Renting Your Property
Renting a home can be both parts adventure and inconvenience. Rental properties can be a great way to invest your money and see a significant return, but rental properties can also take up a lot of your time, effort and energy. Any time you get notice that your tenant is moving out, it’s time to consider: Should I sell my rental property?
But how do you answer that question? Here’s a look at some key factors to consider when you find yourself asking: Should I sell my rental property or keep it?
- Monthly Cash Flow: What type of monthly cash flow are you seeing from a property? Obviously, if you’re clearing several hundred dollars each month after all expenses are paid, then you’ve found yourself a nice investment. Even if you’re breaking even or taking a slight loss, though, the investment may be worth it. But, if you’re taking a significant loss on a regular basis, it may be time to divest yourself of the property and put those dollars to work in a better investment each month.
- Historic Vacancy Rate: How often is your tenant turnover, and how long does it take to find a new tenant? These are important questions to ask because it costs you money to own a house without a tenant. And, it most likely costs you money to market your property and secure a new tenant. So consider how often you’re going through this process and how long you typically endure lulls without a tenant. If you experience high turnover and lengthy periods where your property sits empty, it may be time to move on from the investment.
- Current Return: Of course, when you’re debating when to sell a rental property, you have to look at the price you could sell at right now. You may have to decide when to sell a rental property at a loss if the market is down with no signs of recovery. But, hopefully you’re looking at the possibility of turning a significant profit when you sell. If not, consider hanging onto the property until you can enjoy that significant return.
- Future Return: It’s also important to look at future returns. Do you anticipate the market increasing in the short- to mid-term future? If you think home prices are going to skyrocket in the next five years, you’ll want to hang onto your investment and ride that wave. But there’s never any certainty in the housing market, so keep up with real estate journals and reporting in your area, and keep tabs on how the market is performing. If it’s OK but nearly sure to get better in the future, you’ll definitely want to keep your investment and reap the rewards down the road.
- Condition of the Home: When debating when you to sell or keep your rental property, you should always look at the condition of the home. Why? Because you don’t want to hold onto your home just long enough to replace a roof and an air conditioner and a hot water heater. These are significant outlays that are best transferred to a new owner. You’re unlikely to get back what you put into these investments, so sell the home before you have to make them — and let the next owner worry about replacing the roof or HVAC system.
- Time, Effort and Energy: When you’re wondering whether it is time to sell a rental property, you must also consider the time, effort and energy you put into upkeep and maintenance. If a rental property is driving you crazy, that’s a good sign it’s time to divest. People invest in real estate because they see opportunities to enjoy strong returns. They do not invest in real estate to develop an ulcer. Look out for your mental health and well-being first, and then worry about rental properties later.
At Harrisburg Property Management Group, we put in the time, effort and energy to take care of rental properties so that you don’t have to. We have a team of experienced, knowledgeable and dedicated professionals who know the Harrisburg market inside and out. They use their knowledge and experience to help property owners get the returns they expect without putting in the hours of hands-on attention that rental properties require. Are you wondering: Should I sell my rental property in 2017? Get advice from the experts when you call on Harrisburg Property Management Group.
Contact us today about renting vs. selling your property.
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