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5 Signs It’s Time to Bid Farewell to Your Investment Property

Bid Farewell to Your Investment Property

Your investment property holds a piece of your dream for the future. You bought it hoping it would generate income, grow in value, and allow you to build wealth for your family’s future. Real estate is an excellent place for that, after all.

Once you’ve had an investment property for several years, it’s common to start wondering how long you should hang on to it. While there is no perfect equation for timing a sale, certain circumstances indicate it is time to find a buyer.

Knowing when to say goodbye to an investment property can be tricky when your financial freedom is on the line. But there certainly are times when you should sell an investment property. While each property you hold presents an opportunity to generate wealth, it is also wise to know when to part ways with an investment.

When the circumstances surrounding your investment are complicated, you might even find yourself wondering, “How do I sell my house…”

  • in a different state.
  • in spite of it needing significant repairs.
  • to a cash buyer.
  • in a slow market or in as little as a week.

And if any of that sounds familiar, it might be time to partner with a real estate investor with cash for homes to make the deal quick and easy.

What would drive someone to sell an investment? There are many things, but these are the most common:

1. You Need the Cash for Something Else

People with investment properties know that their equity might be useful someday. It is very common for people to sell an investment property to access the cash they have tied up in it. Regardless of what you need the money for, it’s great to have an asset that can free up cash when you need it.

This can apply to when you’ve found a new investment opportunity as well. When an investment opportunity presents itself that you simply cannot walk away from, you might need to free up some cash to make it happen. If you have the funds you need for a new opportunity tied up in an investment property, you can cash it out to pursue your next endeavor.

2. The Upkeep is Too Expensive

At a certain point, the expense of maintaining a property no longer makes sense. As properties age, they need more frequent repairs, and improving a property is time-consuming and expensive. When your investment costs you more in maintenance than it brings in, it’s a sign it’s time to sell off that investment.

3. The Market is Stagnant

Perhaps you’ve held a property for a long time and noticed that what was once a thriving area has taken a turn. People occasionally find themselves holding onto a property that no longer has growth potential. If you identify concerning trends in the market your investment property is in, it may be worthwhile to cash out of that investment and find a new one in a more profitable area.

4. It’s Not Performing as Expected

You likely bought your investment property with big dreams of earning income. If you feel like you are spinning your wheels to try and make those dreams materialize, it might be time to move those funds to a more lucrative investment. This happens to even the best investors; what should have been a slam dunk turns out to be a dud. There is no shame in selling off an investment to try and find a better one elsewhere.

5. Your Investment Portfolio is Unbalanced

Tying most of your net worth to real estate investments creates an unbalanced portfolio. A portfolio like this carries more risk because a market crash can wipe out your entire net worth. Occasionally, investors accumulate properties and suddenly find that their wealth depends entirely on the housing market. This scenario might be the right time to sell and pursue more diversified investments.

Owning investment properties presents a world of opportunity for people to accumulate wealth and generate income. Intelligent investors also understand that some investments serve them for a time and will open doors to pursue different opportunities in the future. When you’ve decided to sell, consider other outside drivers that contribute to the potential for profit:

  • Talk to your accountant about tax implications and how to maximize tax advantages.
  • If you are selling an investment in a vacation destination, consider how the season might affect the sales price.
  • If you really need to sell fast, contact an investor who will pay cash. This will allow you to get money in the bank quickly.

Selling your investment property is just the beginning and marks a milestone for the financial dreams you had tied to that property. You’ve opened the door to the possibility of increasing your net worth and creating opportunities for your family.

Video

5 Signs It’s Time to Bid Farewell to Your Investment Property

Infographic

After owning an investment property for several years, you may start to wonder how long you should hold onto it. While there is no perfect formula for determining the right time to sell, this infographic highlights the most common indicators for selling your investment property.

5 Investment Property Selling Signals Infographic

About Express Homebuyers

About Express Homebuyers

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