Money Monday!

TO SELL OR NOT TO SELL?  That is the question. With real estate prices at historic highs, now is a good time for rental property owners to take a hard look at their true return on investment (ROI).   Real estate investors often pay disproportionate attention to the rent check, yet don’t properly factor in big-ticket expenses when determining return on investment. Sound familiar?

 Consider the following questions as you evaluate whether to keep or sell your rental property:

• Do you keep a detailed list of your ongoing expenses?
• How much have you spent in the past five years on improvements?
• Next, calculate the deferred maintenance. What major projects like a roof /HVAC system might be needed next?
• Do you factor in vacancy risk in a down market? Are you addressing the risk of picking the wrong tenant?
• Are you accounting for your time? I like to joke saying mutual funds don’t have toilets that break while you are out to dinner with friends.
• Do you benchmark it? In other words, are you comparing your ROI of your rental property to your other investment vehicles? How does it perform in comparison?

If you discover your rental property ROI is not performing near benchmark, you may consider selling now as properties are selling at premium prices.

 

 

 

Any opinions are those of Wheeler Financial LLC and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without
notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss
regardless of strategy selected