Theoretically, real estate appreciates forever. The housing market rises and falls but given enough time, all properties are worth more than their purchase price. However, holding on to properties forever is impossible. Moreover, taking advantage of a high point in the market can be the best decision to make. If you find that the following situations apply to you, now might be the right time to contact a company like We Buy Any Home and inquire about selling.
1. When a Major Life Event Occurs
Some major life events signal that it is time to reconsider owning an investment property. You might gain a new family member, lose a family member, your career might change, you might have to relocate your primary home, and these are just a few examples. Looking after an additional property in addition to your home may no longer be viable.
2. When Rental Income Matters Less
If your primary source of income suddenly increases, the passive revenue you receive from rent may not matter so much. As the money and joy of owning extra homes fade, the responsibility and headaches of dealing with other properties never diminish. Owning an investment property should not be a chore and if it becomes more trouble than it’s worth, it’s time to sell.
3. When Housing Construction is on the Upswing
A sudden boom in the number of homes available will diminish the value of your investment property. Eventually, the market could recover but waiting years to regain that lost value is not always feasible. Instead, try and keep an eye on developers’ plans for the local real estate market. If there are plans in the works to construct a large number of new homes near your investment property, you should consider selling before your property’s price falls.
4. When Major Repairs are in the Near Future
Your investment property needs renovations now and then. The roof should be checked and possibly replaced every 10 to 20 years, the house’s boiler should be updated every 15 years, new legislation might mean you have to update the wiring, and there are plenty of other works that come up periodically. To maximize the value of your property, it is best to sell it about three to five years before any major renovations are due. If you wait to sell the property and it needs work, then its value decreases.
5. When you should Diversify your Assets
If too much of your money is tied up in real estate, you are vulnerable to crashes in the market. If you have used debt to acquire your investment property, then you are even more at risk. The best strategy is to diversify your investments across three to four different categories. Some investment types have lower rates of return, but you are better protected against the collapse of any one market.
6. When you have a Better Investment Opportunity
Sometimes, you will an investment opportunity with lower risk and a greater rate of return. Sometimes this can mean selling your investment property to buy a different investment property in another area. Other times, you may want to invest in a business, some stocks or anything else that seems to be in a strong position. Selling an investment property quickly in these circumstances can be tough so it is worth considering a company like We Buy Any Home to ensure you have time to capitalize on a new venture.
7. When you Inherit Property
Some people never intend to own a second property but find themselves with an unwanted house through inheritance. If you never wanted to be a landlord, simply selling the second property and getting on with your life can be the best decision. Inheriting a house does not mean you are obligated to take care of it. Owning one property is a lot of work and multiple properties just increases the amount of stress you have to deal with. If you do want to be a landlord but the inherited property is too far away to look after, selling and then reinvesting in a more convenient location is always an option.
8. When your Property has Stopped Earning Passively
While the rental and retail markets from properties are linked, they still function independently. It is possible for renting your property to become a difficult prospect due to a lack of tenants and other issues. Even when renting is not a great option, the market for selling your property can be in a strong place. Instead of sinking money into a property that is failing to generate any income, you can sell it and make a profit on whatever you spent to originally buy it. This is a particularly good idea if your investment property is paid for with a mortgage.