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As a real estate investor, you more than likely entered the arena of real estate for one reason and one reason only: to make a profit on your investment. Whether you own just a handful of rentals or a large portfolio, the goal to earn positive cash flow is the same. What happens though when month in and month out, you continue to see your profits plummet? In that case, it might be time to sell your rental property.
Negative cash flow results when it takes more money to maintain the property annually than what you’re receiving each year in rents. When added together, property taxes, vacancies, property management, and repairs can quickly add up. Like anything though, knowing if selling your rental property is the right choice is not always so black and white. If the property is in an upcoming area then it might make sense to hold on a bit until the neighborhood appreciates. However, if there’s no new activity and you’ve noticed values are declining, it’s probably better to sell now before you end up in a worse position.
Cash flow isn’t everything. Some investors may want to cash out so they can retire from land lording altogether. For others, short term and long term goals can have a big impact on their decision. Maybe you’ve decided to build a portfolio in a specific neighborhood or want all of your properties within a certain distance of each other. After all, properties dispersed all over can be tough to manage, whether you are managing the properties yourself or if you’ve hired a property manager. Or maybe you have positive cash flow, the properties are located exactly where you want but property management itself is the issue. Since finding a qualified property manager can be a chore in its own right, for some the hassle and stress may not be worth the profits (especially if the profits are small).
Whatever situation you may find yourself in, we are here to help. If you feel overwhelmed and are ready to sell your rental property, give us a call so we can make you an all cash offer today.