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PRESCOTT INCOME PROPERTY SELLER'S GUIDE

Seller's Guide Home
Identify The Need
 to Sell
Determine Your Financial Goals/Needs
Work With An Income Property Advisor
Establish Your
Timeline
Develop a Selling Strategy
 

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  Identify the Need to Sell

What are the key factors to consider when selling an income property?

There are many situations that may lead you to decide to sell your residential income property. Some are based on market conditions and the fulfillment of your investment goals while others may be based on a change of lifestyle (moving to a job in a new city, lack of time to devote to the continued well-being of the property, etc.) Some possible selling motivators include:

Problems
Factors beyond your control such as a deteriorating neighborhood or continual vacancies may be affecting the profitability of your investment. Or, you may simply decide after a while that you don't enjoy the process of managing a property. Some people just don't like having to respond to tenants concerns and feel a sense of inconvenience. If you have become uncomfortable it may be time to move on.

Changes in Life Situation
You may be at the age when it's time to retire and just relax with no one to attend to but yourself. Or you may feel after a few years of owning an income property that it has served its purpose. You may now prefer to move on to a single-family home. If so, the project has been worthwhile and successful in its time so be proud of you accomplishment.

Profit Realization
It may be the right time to cash out your investment. You may need access to the capital that is in your property. If your area is in a hot market and prices are higher than ever you may be in a good position to sell. Before you do be sure you are aware of the tax implications of selling.

Whatever your reasons there are several factors you should consider to help you understand exactly when to sell your investment property and how to achieve the highest sale result:

Your Neighborhood
Look around your neighborhood to get a sense of the state of the income property market. Are there many houses for sale currently? Have the "For Sale" signs been posted for a long time? Or are "Sold" signs going up very shortly after they go on the market. Pay attention to the activity going on around you. Timing may often be as important as location.

The Economy
Identify whether the general economic conditions are favorable to selling your real estate investment (look at mortgage rates, economic forecasts, etc.)

Rental Market
Identify whether there is still a strong rental market in your area to make your property attractive to another investor. How does your property compare to other rentals in the area? If you're not sure then go "apartment hunting" to see how you stack up.

Investment
Compare the overall real estate market in your area to other forms of investments. Assess the relative merits of purchasing your property vs. investing elsewhere. Income property buyers understand different types of investments and will put their money where it will work best. Put yourself in the purchaser's shoes. Know how your property stacks up by comparing it to other investment vehicles such as stocks, bonds, mutual funds and money markets. Changes in the stock market may push more investors toward real estate and the demand for good properties with high rates of return will increase.

 

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