Investing in real estate is a great idea for those who want less risks when engaging the market. You are almost always buffered by your property’s intrinsic value, notwithstanding the climate in the real estate market. That’s why many people keep properties for the long term to declare as a financial asset.
However, there are times when, just like an old and dying flame, you just have to let go. Here are five red flags indicating that you’re better off without the property you have:
Owning the property is more trouble than it’s worth
On the surface, investment properties—especially rental ones—look like a surefire way to make money. However, they can also lead to a lot of headaches and frustrations. Clogged drains, broken doors, unruly tenants, and bothersome pets are just a few of the challenges that a rental property owner may face. You need to address these issues immediately, and they can easily pile up and take their toll on your patience. If the pressure of tenants and maintenance is getting to you, you will likely feel relieved to sell your property.
When you are short on finances
If you are struggling to make ends meet or if you have a mounting debt problem, letting go of your investment property could help you through the financial strain. Look at the bright side: this could mean starting fresh and having a little extra for yourself. Of course, not everyone’s financial situation is the same, so it’s important to crunch the numbers before deciding to sell.
It’s making you lose money
There are many things that could turn a once-profitable property into a cash drain. It could be that you are spending more on maintenance, or perhaps the cost of taxes and insurance have risen, or maybe market rental rates have dropped.
If you can no longer absorb negative cash flows month after month, your property may no longer be worth keeping.
Your property’s value has grown significantly
When it comes to real estate investment, the ultimate goal is to have the property value appreciate. There are plenty of ways to add value to a property, ranging from low-cost improvements such as cleaning, painting, and replacing fixtures to major renovations such as changing the flooring, updating the kitchen, or adding more square footage. If you’ve successfully boosted the value of your property, selling it could net a bigger profit for you than having it rented.
You’re thinking of moving away
It’s easier to manage a property when you live in it or nearby. There’s no need to hire someone to care for it or to collect rent from tenants. But if you plan on moving away, consider selling the property and buying local instead. An accessible property will be easier to manage.
The Destination Properties Utah team has been in business for over 25 years, helping clients sell their existing properties and find new ones to invest in. When you work with us, all your investments in real estate will be negotiated in your best interest and handled with the highest degree of integrity, intelligence, and skill. Call us at 801.745.2009 or email us at info(at)destinationproperties(dotted)com so we can help you start your real estate investment goals in Utah.