E-News
Making Finances Simple. Changing Lives.
In recent years, home values have shot through the roof. As a result, many have sold, or are considering selling their rental real estate properties. But is this a good idea? As with most financial topics, this one also depends on each individual situation. There are numerous factors to consider when thinking about selling your rental.
Do you need the proceeds for other purposes that are more important to you at this time? Are you sick of being a landlord? Do you feel the market is at a great point as far as prices? These are all questions to ponder. When it comes to market timing, we always recommend folks stay away from this temptation to guess where things are and where they’re headed. While it can appear that housing prices are inflated and at high points, you can just never guess and time the markets. Ask folks who thought housing prices were ridiculous and likely at high points just two years ago…prices have gone up considerably even in those two short years. There are too many factors that can alter the directions of things. Nobody could’ve predicted COVID would come and create the resulting market affects, such as building/supply/labor shortages that created a supply & demand dynamic we’ve rarely seen. And now how is the Russia/Ukraine conflict going to affect things? Again, it’s impossible to predict markets. So we recommend trying to eliminate the marketing guessing/timing, and instead consider your personal situation. There are many benefits to keeping rentals, such as creating generational wealth (many families have benefitted greatly from keeping real estate for many years). There’s also the huge benefit of keeping property until you can send it on to your heirs upon your passing. This allows them a “step-up” in cost basis that can tremendously reduce or even eliminate taxes on the home’s appreciation. You may like the fact the payment on real estate stays relatively flat over time, while rents can inflate quite a bit, creating a nice monthly income margin. It’s a big decision, and one you don’t want to take lightly. If you’d like to discuss your individual situation when it comes to your real estate decisions, don’t hesitate to contact us! Comments are closed.
|
|