If you own a rental property in Pittsburgh, there’s a good likelihood that you periodically debate whether you should continue owning the property or sell it. The primary reason for holding onto any property is an obvious one: your rental property generates passive income for you.
To help you determine if it’s time to consider selling your property though, here are ten factors that you should weigh when making your decision:
- You’re “upside-down” in your property. Whether your rental property generated money when you initially bought it but it no longer does or whether the property has been in a perpetual negative cash flow situation from the very start, holding onto a rental property that costs you money can become an untenable financial burden. Crunch the numbers to see if the rent covers all of your expenses. Also, when doing this, make sure to include EVERYTHING related to the cost of the home including the mortgage (if it still has one), taxes, maintenance and any other costs.
- The neighborhood isn’t what it used to be. If you’ve owned the property for a period of time, there’s a good chance the neighborhood has changed. Few things remain the same in this world over time so it might be time to ask, “Has the neighborhood changed for the better or worse?” If it’s the latter, now might be a good time to get out.
- You’re tired of being a landlord. Being a landlord is difficult. You have to be vigilant to make sure your property is well maintained and you are the first point of contact when dealing with tenants. As every landlord knows, when tenants are contacting you, it’s rarely to wish you “good morning.”
- Building off the previous point, perhaps you’re tired of dealing with bad tenants. Horrible tenants can wear anybody out. If this is your scenario, check out a previous blog post discussing this specific situation.
- You’re continually dealing with bad or incompetent property management companies. Some property owners opt to take a hands-off approach as landlords and prefer to employ a property management company to look after their rental. Aside from the costs involved, working with a poorly-run property management company can become tiring.
- Your home is old. The older your home gets, the less attractive it can look to prospective tenants. You can obviously sink some money into the home with updates but this only makes sense if these expenditures don’t create a negative cash flow.
- The home is in need of too many repairs. Need a new roof? Do the windows need updating? Are there cracks in the foundation? If there are repairs on the horizon, particularly if they’re major ones, now might be a good time to sell.
- Your IRS depreciation benefit has run out or it’s about to run out. This is all about saving money on your taxes but these savings eventually come to an end. For a better explanation, check out this post by the Financial Samurai who breaks it down mathematically and advises you to sell your property once the tax benefit runs out.
- Time is money. Are you spending an excessive amount of time tending to your property? If your rental property is earning you a sizable income, then it might make sense. If not, could your time be better spent doing other things? Perhaps pursuing better moneymaking opportunities?
- You’re no longer interested in owning the property. This is purely an emotional reason. Maybe you’re just tired of the home and would prefer to use any money generated from a sale for something else whether it be travel, paying off debts, dealing with a medical situation or any number of other reasons.
If owning your Pittsburgh-area rental property continues to be both a financially and emotionally positive experience for you, then you should continue owning it. However, if you wish to sell your property or even if you are simply considering the possibility of selling it, we would welcome the opportunity to speak with you.
All Cash For Homes PGH is a Pittsburgh-based real estate investor. We use a fast and simple process to buy houses. Because we aren’t a real estate agency, we never charge any agent commissions, which can run as high as 6% of the sales price, and also don’t charge you for any other incidental fees or closing costs.
After you contact us, we’ll present you with a free, no-obligation cash offer on your rental property. You are welcome to reject or accept our offer. There is never any pressure but, if you do accept it, we’ll pay you with cash and buy your property as-is. You don’t need to make any repairs and we normally close within 30 days.