How do you know if it is a good time to sell your rental property? Great question! We have had several clients that have called us this year to inquire as to the market conditions this spring/summer and whether now would be the time. Of course, my first inclination is to exclaim a resounding, “Yes!!! We have low inventory and you will get top dollar in this market!!!” Yet, we should really slow down just a moment and ask a couple of key questions before making such a decision…
1) Do you want to be an investor or was the rental idea a short-term plan? Many of our clients bought properties that did not suit their needs, yet when the market was low, they could not sell them to make the move they needed to make. Therefore, renting the property out for a few years was a great solution. For these clients, however, their long-term plan was not necessarily to keep the property as an investment. If this is you-it is a great time to sell!
2) Are you an investor who is looking to do a 1031 exchange? We have several clients who do intend to invest in real estate at various levels, and they would like to exchange a more seasoned property for a new one to maximize their tax advantages, etc. If this is you, we need to talk! Due to rising prices and slim picking, this may or may not be the best time. I cannot diagnose this sort of move until I know the stats on the existing property, so we can meet to discuss the details and see if now is your time!
3) Do you want to exit your rentals and retire from property investment? Then yes! In most cases, we can plan a strategy around selling the rentals that will maximize your gains and minimize capital gains loss, etc.-with the help of our CPA, of course!
There are various types of investors in our market. If you are one who is looking at selling a rental property or simply making a switch, give us a call and we would be happy to consult you on your situation and decide if now is YOUR time.