Although rental property can provide you with a steady – and passive – income stream, there may come a time that you decide to sell, move on and pursue other investment opportunities, or even to just simplify your life.
But before you put up the For Sale sign, it is important to determine whether or not it’s really the right time to sell. For this, there are a few key factors to keep in mind:
- First, if your property’s depreciation benefits have run out (or if they will run out soon), it could be time to sell – even if you move on and purchase another investment property in the future. If you use straight line depreciation on a residential property, these benefits will run out after 27.5 years.
- It is also important to consider your age in terms of when you are able to tap into various other income benefits. For example, if you are age 59 ½ or over, you are allowed to take withdrawals from accounts like a traditional IRA and 401(k) without incurring a 10% IRS early withdrawal penalty. Likewise, you can begin receiving Social Security (at a reduced income amount) as early as age 62. So, if the income from these sources can easily replace the income you’re earning from your rental home(s), then it may be time to move on and sell your property(ies).
If your investment property is still providing you with a healthy return, it might not be necessary for you to sell it – even if you don’t want the time-consuming responsibility of maintaining the rental and managing tenants. In that case, hiring an experienced property manager could offer you with the best of both worlds.
At Central Florida Property Management, we offer a wide array of services that can make your life a whole lot easier, and still put money in your pocket. So, if you own rentals in Orlando and / or the surrounding Central Florida area, give us a call and see how we can help.