As coronavirus restrictions begin to ease up, investors are curious if now is a good time to sell an investment property. It’s understandable that some sellers may be hesitant to proceed in this current climate, but depending on your circumstances, selling your investment property now may be to your benefit.
1. The investment property needs extensive work
Say your investment property needs unexpected repairs that you deem too costly to fix. Depending on the renovation, you could end up spending tens of thousands to complete the repairs — which can be crippling if you don’t have the immediate funds on hand. The list below details some common costly repairs:
● Heating and cooling systems
● Roof replacements
● Termite damage
● Foundation damage
● Water heater repair or replacement
● Various electrical issues
● Septic tank systems
If an investment property requires costly repairs that don’t fit your budget, you may be better off selling it instead. You can then invest the money you made from the sale into another property that won’t break the bank.
2. Selling a property to make way for a new one
Purchasing a new real estate investment may sometimes mean having to sell one of your current properties. Depending on your financial and investment situation this may be something you need to plan for before moving forward.
Interest rates on mortgages are also the lowest they’ve been in years, so buying now will allow you to take advantage of this financing method.
3. Being a landlord can be too much commitment
Some real estate investors may underestimate the work required when taking on the responsibilities of a landlord. While managing rental properties can be rewarding and profitable, they can also bring on several challenges, like:
● It’s a significant time commitment.
● You’re responsible for maintenance and repairs.
● You must manage tenant issues like late rent payments, noise complaints, property damage, etc.
● There’s a chance you can be sued.
Before deciding to become a landlord, research what the role will entail so you aren’t left with more work than you intended. And if being a landlord ends up being too much of a commitment, feel free to sell the property.
4. You’re experiencing negative cash flow/ the property is losing value fast
If any of your investment properties have been experiencing a negative flow in cash for an extended period, it may be time to sell. This is also true if the property is losing value due to its area or to other unforeseen factors. After all, real estate investing is a business that entails understanding when to cut ties with an asset.
Hubzu can help facilitate a safe buying process
The four reasons above should add insight and help you understand whether moving forward with selling a property during this time is the best move. Despite COVID-19, the reality is the selling process can now be handled online, helping to bring social interaction to a minimum. And you don’t have to go it alone, Hubzu’s signature selling auctions can help connect you with buyers in your area.
For additional resources to help you navigate the current real estate market, please visit our COVID-19 resource hub by clicking here.