With the real estate market experiencing some changes, many people are once again considering selling their properties. While I always recommend holding onto properties for the long term, sometimes selling makes sense. It can be difficult to know when it is time to sell, especially if you have held onto a property for a long period of time. If you are on the fence about whether or not it is time to sell, then consider these five signs to help you decide.
Paying Down Debt
When preparing to retire most investors sell some of their investment properties to pay off their debt on their home or debt on other investment properties. This will then reduce their expenses and give them more income to fund their lifestyle. Therefore, if you are considering selling your investment property it is worth timing your sale with a strong selling market and towards the end of your tenants lease. That way you can appeal to maximum number of buyers and fetch a premium price.
Your Property Has Equity
When it comes time to sell your property, you want to come away with at least 20 percent equity from the sale, as this is the ideal amount for a down payment on your next residence or investment property. A sale here would work if this allows you to upgrade your home or you have a better area identified for investment. If you are still underwater or the sale will not bring that much equity, then you should wait a bit longer.
You Can Afford to Sell
Another sign that it is time to sell your property is that you have the funds to actually do so. To sell the property for the maximum value, you need to put some money into the home prior to the sale. This could be a smaller renovation such as repainting, or it could be major project such as fixing problems in the foundation. If you have the money to do these repairs, then it is probably a good time to consider selling.
The House Will Only Continue to Depreciate
It is natural for the market to experience ebbs and flow, but if you find that your property will only continue to depreciate, then you should sell it as soon as possible. It could be that you have an overwhelming number of major and expensive repairs that you cannot afford to do. In this instance, you may get more value from your home by selling it as is and taking a cut on the value than putting in the money to make the repairs. The property may also be in a neighbourhood experiencing depreciation without any sign of an upturn. This could be something coming into the neighbourhood, such as a landfill or prison, or some other outside influence that is more than just the regular ebb and flow of the housing market.
Your Home Does Not Match Your Lifestyle
The final sign that it is time to sell your home is when it no longer fits your lifestyle. This could be upgrading from a starter home to a larger home with room for the whole family, or it could be downsizing after the children have left. It can be really difficult to make this decision, because you typically have emotional ties to the house. There may be other lifestyle considerations you need to make, including a handicapped accessible house.