Deciding When to Sell Your Portland Rental Property
The housing market is booming, especially in Portland with an average house price of almost half a million dollars! With prices continuing to climb, you may be asking yourself if you should sell your rental property or hold on to it. But before you rush into making a decision, it’s important to weigh your options and consider several factors so you can make the best choice for your unique situation.
- Will your property produce positive cash flow?
Perhaps one of the most important factors to look at it is the math. Ask yourself if your property is producing a positive cash flow. Once you deduct every expense associated with the property, do you have a profit or loss? If you have a loss, you may want to consider either raising monthly rent or selling.
- What’s your return on investment?
If you’re serious about selling, calculate what your profit would be before listing. For example, take agent fees, closing costs, and other sales expenses into consideration when calculating your ROI. If you determine that your ROI from your annual cash flow is less than 5%, it may not be worth keeping. We recommend rental properties with at least a 5-10% ROI. At bare minimum, your cash flow should be $100 a month.
- Think about taxes.
In most cases, if you sell your real estate property while making a profit, Uncle Sam is going to want a cut of it in the form of capital gains tax. That being said, you may potentially owe the same amount of taxes if you keep the home as a rental for several years. Real estate values have no guarantee. To learn more about capital gains, we recommend consulting with a tax advisor.
- Look at the future of the housing market.
It’s impossible to predict the future of the housing market. However, it can be beneficial to look at the growth of your city and analyze the current trends in your market. Experts expect prices to continue to climb, but sales growth will begin to slow. After performing thorough research, it’ll be easier to make an informed decision on whether to hold on or let go.
- How are your tenants?
If you have a long-term professional relationship with your tenant, it may be a good idea to keep your rental property. However, if your tenant is a headache to manage and requires a significant amount of time and patience, consider hiring a property manager.
We make Owning Property in Portland Profitable & Enjoyable
Considering the current status of the housing market, it’s a great time to own rental property. If you decide to keep your rental property, the experts at Real Property Management can protect your investment, minimize your costs, and maximize your income.
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We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.