Have a Plan
Just as you have a plan for buying an investment property you must have a plan for selling. Make sure you’re receiving the market rate for rents when you decide to sell. It’s better to have some vacancies with renters who are paying market rate rather than a large number of renters paying below market rents. The value of your property will be based on these most current totals. If needed, forewarn tenants that you are selling the property and need to increase the rents.
*Rent control is a factor in a number of areas, know this before you buy property.
Draw Down Expenses
Look for ways to reduce expenses when you’re planning to sell. Whether it’s cutting back on the advertising you’re doing, lowering your insurance deductible, or lessening the times the landscaping is done on your properties. This will all reduce your expenses and increase the cash flow - which is one of the key factors of buying property for an investor.
The 1031 Exchange
Have an investment you want to buy ready when you’re set to sell. You’ll need to move the money you’ve earned into that property so you don’t have to pay a capital gains tax. Buy a property of like kind - lean more at 1031 exchanges.
Pricing Your Property
If you don’t price your property right you could lose out and end up holding the property for a long period of time—further exasperating your situation as the home becomes tagged as a property that should be discounted since it’s been on the market too long. Figure out how fast you need to sell the home. Are you on the verge of foreclosing or have backup funds and can wait out the market a bit.
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