Should I Sell My Rental Property?
My landlord clients often ask “should I sell my rental property or keep it?”. First, I am a big proponent on trying to keep a rental property at all costs. In my opinion, selling a rental property should be your last resort. I believe real estate is one of the best investments out there. Therefore, when clients ask me about selling their rental properties, I try to convince them otherwise.
Nonetheless, if you do decide to pursue the options of whether you should or should not sell your rental properties, ask yourself these three questions:
1. Is the money worth it?
If you are making at least a 5% cash flow return on an annual basis, keep the rental property. (If you need help calculating your cash-flow annual return, send me a message, and I will gladly let you know right away!)
2. What do you plan to do with the money after you sell?
This may be a heavy loaded question as it may bring up even more questions. Will it sit in a bank account? Will it be re-invested in another investment opportunity? Depending on what you plan to do with the proceeds, you should determine if it is worth selling your rental property or not. For example, if you plan to just keep the money in your bank account, I would suggest NOT selling it. You make close to nothing on that money sitting in a bank.
On the other hand, if you plan to re-invest, then selling to put your money to work in a better investment may be the right move.
3. Are you sick and tired of being a landlord? Tired of dealing with tenants? Unhappy and frustrated with the process of managing the property and repairs?
If the answer is yes, then, sell! If you are not happy anymore or have become miserable being a landlord, you should not sacrifice your happiness for it. There are many other things you can invest the money on that will not make you unhappy.
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