The real estate business continues to be a successful venture worldwide. In the rental business, you are assured of consistent income and a rise in your property price when all is well. But what if you have to decide whether to keep or sell your rental property but you aren’t sure if keeping the property is still worth it?
Owning a property in California
If you own a property in California, United States and want to move to another state, deciding whether to keep or sell the property is not easy. It is even more dilemmatic if the property is in a heavily built-up urban area like Southern California, which can either make or break you financially.
Some cities in California recently increased their real property transfer tax rates. This is one of the basic things you need to know when you are preparing for the sale of a rental property or deciding whether or not to keep a property in the state.
Keeping a rental property
Before deciding to keep your rental property, you have to check if it fits to be a rental property to keep. Some of the determinants include:
- positive cash flow: Any rental property with a positive cash flow is for keeps. If you manage to pay all your property bills, including mortgages, and remain with some good profits, you don’t need to dispose of the property.
- property in an upcoming market: If your property is where the market is growing, it’s essential to keep it since the profits will continue flourishing.
- reasonable rent to price ratio: If your property is giving you at least 1% of the selling price per month, you don’t have to sell it.
- good tenants: They are gold, and some landlords will never want to trade them with anything else.
- not fancy property: Some properties are easier to rent than sell. If you have a simple property which won’t attract much in selling, it is better to keep it.
Selling your property
Having a rental property is one of the best investments. However, there comes a time when you can’t hold any longer due to some factors. According to expert at SoCal Home Buyers, here are some reasons which will make you sell your rental property:
- loss of revenue: if you have non-paying tenants or inconsistent occupancy to your house, which sees your revenues going down, it’s time to consider selling the home. Such happens when you can’t service your bills from the rental income.
- extensive renovations: When everything keeps on falling, and the maintenance costs are becoming all-time high, you should consider selling the rental property. This situation happens when you have an old house.
- deteriorating neighborhood: When plots and houses are losing value and investors leave your area, it’s time to consider winding up too and selling the property.
- a distant property: It comes a time when one shifts their area and looks for greener pastures. If you can’t maintain the property from afar, you should consider selling it to have peace of mind.
- changing your investment: You might want to sell your house to change your investment to private homes or other ventures not related to the real estate business.
There are no better days of selling your rental property. If you see things are worsening, you should calculate the positives and negatives of keeping the property and do the needful. If you decide to sell your house, it’s essential for preparing for sale to get the best value out of it.
CONAN Daily 