Do you own an investment property in Baytown or in any of the surrounding cities? If you do then you may want to consider selling. Although many investors have the understanding that holding their investment property is always the best strategy, there are current market indicators that are supporting those investors who are open to change. Overall, investors who are holding onto their investment assets may be leaving money on the table. Here’s why:

Use Your Equity to Increase Your Cash Flow

Leveraging your current investment property to increase your cash flow can improve your financial position. By selling your current home and reinvesting in either a larger, single family home, or a multi-unit building such as a duplex or triplex, you can increase your cash flow. You can use the cash received from the sale of your current investment property as a down payment and take advantage of the low interest rates to acquire a loan on the new property.

Another option that many consider is refinancing their current investment property to purchase a second property. However, there is a major pitfall in this plan that many overlook, and that is the hassle of managing two properties in separate locations. By consolidating your properties onto one lot you can reduce the time it takes to manage the properties.

Do a 1031 Exchange

By participating in a 1031 exchange, you can leverage the equity in your current investment property and trade into a larger one without paying capital gains taxes. A 1031 Exchange, which is defined under section 1031 of the IRS Code allows investors to defer paying capital gains taxes on an investment property when is it sold and another “like-kind property” is purchased.

Take Advantage: We are in a Seller’s Market

Don’t miss out on the current opportunity – we are still in a seller’s market. This means that due to increased demand and limited supply you can receive a premium on your home. Wait any longer and the market could shift, reducing your return on the sale. You may be wondering how you will be able to buy the next property if it is a seller’s market. This is simple: Thanks to the cash you will have at hand from your current home, you will have maximum leverage to negotiate on your next purchase. Furthermore, if you are considering investing in an alternative asset, such as a commercial real estate property (apartment complex), the market has different demands. With the right buyer’s agent you will most likely be able to improve your position.

Move to a Stronger Market

Economists are predicting that in the next nine to eighteen months the market will start to take a hit, and this includes the real estate market. This means that any property owners need to start preparing for the long term; if they are considering selling in the next ten years, they should execute now. If they wait, they could risk entering a recession, which could then take years to recover from.

In this instance, moving to a stronger market can be the solution for any investor. For example, purchasing in Houston could prove to be an intelligent decision. More people are moving into the cities for job opportunities, which increases rent and demand for rental units. Moving to an urban market provides more security in economic uncertainty.

Get Out

Maybe it is just time for you to get out of your investment property. Are you currently experiencing more stress than reward by managing your property or properties? Do you have tenants that are no longer worth the worry? Are you facing foreclosure on the property? Is the property vacant? Are you entering retirement and looking for less work? If you answered “Yes” to any of these questions, then getting out of the investment may be your best option.

Sell, But Don’t List

Many investors avoid exchanging or selling their investment assets because they don’t want to hassle with selling their property on the market. We have a solution that will help you forego this process…Sell to us, Gulf State Homebuyers. We are investors located in Baytown who are interested in buying your property. We buy homes in all conditions and as-is. This means that as the owner you will not need to hire any contractors, real estate agents, or appraisers. Instead, we do all the work. Our process is simple. Once you contact us, we will set up a time to walk the property. We will then have one of our qualified staff meet you and they will give you an offer that same day. No obligations. No hassles. No fees. If this is something that interests you, call us today to get started.

The Ugly Truth Behind Renting Out Unwanted Property

When you hear of real estate investments, what comes to mind?

Most individuals in today’s society have a vague understanding of the benefits of becoming a real estate property owner – it can provide a passive income, create financial opportunity and wealth, and protect individuals against losing capital through inflation. Therefore, when people acquire properties, they often believe that renting the unit or units is the best option. However, renting properties is not an easy task and unless you are 100% committed, it may be damaging to your well-being, including emotionally, physically, and financially.

Emotionally. Managing a rental property can be time-consuming and emotionally draining. You may be dealing with troublesome tenants or unexpected neighborhood changes. You must always be knowledgeable of the market and up to date with current trends.

The challenges associated with maintaining the property can have adverse effects on your relationships – especially if you are resentful of the concept that you must manage the asset you have acquired. The increased stress level can create short tempers, aggravation, and mental fatigue.

Physically. Emotional stress can take a burden on you physically, creating unexpected exhaustion – it sets off a series of reactions in your body that affects your sympathetic nervous system. Continued stress without proper care can slow or shut down your digestive system, increase cardiac output, and increase blood sugar. The effect on your body is that it places your body in “flight” mode.

Furthermore, managing a property often takes a physical strain to complete any maintenance. Depending on the help that you have, you may be responsible for maintenance issues such as fixing roofing and reflooring a unit. This work is physically exhausting and can cause sudden and unexpected pains throughout your body.

Financially. Investment properties do not guarantee an income – especially unwanted properties. There is specific knowledge and expertise that must be practiced at all times to ensure the financial benefits of the unit.

Can you afford the cost of maintenance? Can you pay the taxes? Can you balance a profit and loss statement? Can you risk having vacancies and poor tenants? These are all questions to consider when analyzing the pros and cons of managing an unwanted property. When examining the profit and loss statement, consider the following:

● Repairs can be expensive
● You will be responsible for taxes
● Vacancies can create negative cash flow
● Marketing vacancies will cost money
● Laws protect tenants – even bad ones
● Owning real estate can have unexpected legal issues arise
● Real estate owners are responsible for liability insurance

It may be time to assess if renting out your property is the best-suited option. This is especially important to consider if you obtained the property unexpectedly, whether through a divorce or inheritance.

Is Selling A Better Option?

It may seem irrational to sell a property when there is a potential to get income. However, knowing the risks can not only save you money in the long run but also protect your health. If you inherit an unwanted property, there are options you have if you sell the asset.

● Sell your property and find a property that interests you. Success in real estate requires attention and passion. If you have the opportunity to capitalize on an inherited property to purchase a unit that you would enjoy managing, go for the chance. For example, if you inherit a property two hours away from your home, consider selling and purchasing a rental home nearby. This simple move can provide you the same advantages of owning the original, but also save you time and money from reduced commute time.

● Use the equity from the house to pay off your debt – then invest in real estate. If you wanted to utilize the income to get ahead, try getting extra funding built up and then using those funds for investing in other ventures and types of profitable transactions. This method provides you with more risk availability when you are managing an asset – for example, holding out on renting a vacant unit for a better tenant will not be as much of a risk if your entire livelihood doesn’t depend on the income.

● Invest elsewhere – maybe real estate is not for you, and that is okay! There is a multitude of ways to invest your money, whether it be in stocks or bonds. All investment options have the potential for wealth growth, so indulge in the one that interests you.

If you are looking to sell, you have two options – sell on the market or find an off the market buyer. Selling on the market takes time and energy. Selling off the market, however, can provide ease to the transactions and reduce the time frame.

If you are interested in exploring your options, contact us at Gulf State Homebuyers and we can get started with a FREE consultation.

Gulf State Homebuyers

Category Archives: Landlord

Why You Should Sell Your Investment Property in Baytown!