Reasons To Sell Your Phoenix Rental Property
Every rental property owner reaches a time when he or she considers selling the property. And when you find yourself thinking about this prospect, there are several factors that you need to consider to make the best financial decision. Many investment counselors will tell you that selling at the right time is the most important step you could ever make as a real estate investor.
All investors know that a great tax benefit of a rental property is the depreciation. But after a given period of time, that tax break is used up. So now the property needs to be bringing in more than it is costing you without the added benefit of the tax incentive. Carefully reviewing your books for the property will tell you if it is time to sell because the depreciation advantage is gone or will soon be gone.
The Magic Number
In most cases, 12 years is a magic number for rental properties. This is a time when you should have some solid equity in the property that would allow you to make a nice profit. The only reason that could be a downside is if the real estate market in your area is slow and a sale might not get you top dollar for the property. The other reason for this decade-plus mark is the condition of the property. Many major mechanical systems could be at an end of life phase and you could be facing some very large expenses in the coming year or two. If you have been able to avoid making huge reinvestments into the property such as new HVAC systems, then count yourself very lucky, and think about moving on with the sale of the property.
Negative Cash Flow
This can happen when you have a vacant unit, you have a tenant who is not paying regularly or if rental pricing has fluctuated recently. There is no real benefit to keeping a property that is costing you money on a monthly basis, especially if you have some good equity. And if you have been having trouble finding renters due to the dated look of the units, realize that this will only get worse until you make a sizable investment to update.
A Fast Solution
Having a passive income is always nice. But when that revenue begins to demand more and more of your time or when the property begins to cost you money each month, then it’s time to sell it and move on. Contact Higher Offer to learn exactly what your property is worth in a fast all-cash transaction. We are a real estate investment firm who works with owners of all types of properties to complete a stress-free sale on a very rapid timetable. Let us make you an offer today and help make your decision to sell very simple.