The answer to that questions is “it depends.”  The reason that you want to sell will determine whether or not its a good time to sell your rental property.

I Hate Being a Landlord - This is the reason the landlord who asked me the question above gave for wanting to sell his properties.  He has moved out-of-state and the tenants that he’s been getting over the past few years have been driving him crazy, forcing him to spend countless amounts of money and time driving back and forth from Virginia and in and out of housing court dealing with problems.  20 years ago when he started his Landlord Business he didn’t mind it, but now…

If you find that being a landlord is causing you mental stress, sleepless nights and costing money you’d much rather spend elsewhere, than for your physical and mental well-being, which it truly worth much more than money in the long run (the dead can’t spend) than it’s a good time as any to sell your rental property.

I Could Use The Money – If you’ve owned your rental property for several years and you’ve got enough equity to sell it for a profit (not as much profit as you would have gotten in 2007, but that’s neither here nor there) than nows a good a time as any to sell your rental property.

Take your profit and do what you need to do.  Whether its pay down debt, pay your kid’s college tuition, make much-needed repairs on your own place of residence, or retire comfortably, do what’s right for you.

I Can No Longer Make The Mortgage Payments - This reason for thinking about selling makes the decision a no brainer.  If you’re find yourself in financial hot water and creditors are knocking at the door (or ringing your phone off the wall which is more likely) than now is as good a time to sell as any.  Why loose your property and wreck your credit?  Sell it.  Sell it fast.  Even if you have to take a loss.

Don’t be like one seller who, while standing at the brink of financial disaster (foreclosure), refused several offers on her property because she wouldn’t “make any money”.  Now, not only hasn’t she made any money, she no longer owns the property and her credit is wrecked.  Don’t let shortsightedness ruin you.  If you need to sell. Sell.

I’m Not Making a Profit - Sometimes the best laid plans don’t work out.  If you bought a rental property and because of a change in the neighborhood or because of the condition of the property (which you can’t afford or don’t want to remedy) you’re not getting the rents you need to meet your financial goals, than it’s a good time to sell as any.

There’s an old saying that says, “it doesn’t make sense to throw good money after bad” and I believe that.  If you made an investment that has not turned out as well as you would have liked, stop the bleeding and sell, even if it’s at a loss.  Calculate how much money you’re losing and will likely to continue to lose if nothing changes and determine how much you’ll lose now by selling at a loss.  If you’ll save money by taking the loss now, than it’s as good a time to sell as any, if not, hold on to it and hope for the best.

Of course there is one good reason why now is actually a great time to sell rental property. Real Estate investors are out buying in droves, and the investors I work with particularly like to buy two and three family properties. So if you are willing to price it so that its attractive to the more “frugal” investment buyers, your property will be sold in a flash.

As you can tell from my statements, I’m a firm believer that the moment you think about selling is a good time to sell when you have a good reason to do so.  You cannot time the market.  No one can.  No one really knows when this market will recover just like no one knew when the market would crash.

If you don’t need to sell your property, than hold on to it until the market recovers.  Of course it’s always better to sell high, but if you need to sell it either because of financial reasons or just sheer desire, than right this moment is a good time to sell your rental property.  Peace of mind and a stress free life is worth much more than money in my book.

Why do I say that?  Well, the definition of a “business” according to Dictionary.com “is a person, partnership, or corporation engaged in commerce, manufacturing, or a service; a profit-seeking enterprise or concern”.   If you own a property and intend on renting all or part of it for a profit (or to be able to make your mortgage payments), then you are providing a service to your tenants for the purpose of making money.  Or in other words, you’re in business!

Well, you might me be asking yourself, “What does it matter?”  Well, it matters a great deal.  If you want to be a successful landlord then you need treat it like a business.  What are some of the things you need to know to operate a successful Residential Property Rental Business.  Here is a list of just a few:

-How do you find good tenants?
-What do you do if a tenant doesn’t pay his rent?
-How many payments can a tenant miss before you can evict?
-Do you pay taxes on the money you collect from your tenants?
-What services are you legally obligated to provide for your tenants?
-What are the landlord tenant laws in Brooklyn?
-Who is responsible for repairs?

These are just a few questions that anyone who wants to rent out residential property should know the answer to.  Unfortunately, I’ve seen many people buy multifamily houses without ever giving serious thought about the difficulties that can come when you have to deal with rental tenants, and that’s a big mistake.

Owning rental property is a great way to generate income now, and build up equity for the future, however it comes with many challenges. Make sure you are up to them by doing your homework before you take the plunge. After all, you’re going to be a business owner, and you don’t want your business to fail.

To get you started, here’s a website, Mr Landlord.com that is chock full of useful information for landlords and landlords to be.

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