Are you trying to figure out if you should sell your investment property in Myrtle Beach? In our latest post, we offer ways to know it’s time to sell as well as the options available to you!
While owning real estate can be one of the best investments, it can also be the greatest drag on your finances. Not every property is going to be profitable, and not every property is meant to be an investment. Many investors hold on to properties far longer than they should, and at the end of the day it can be costing them money. If your investment property isn’t performing as good as you had hoped, maybe it’s time you consider selling it and taking some chips off the table. Keep reading to help answer the question “Should I sell my investment property in Myrtle Beach?”
Here Are 4 Signs You Should Sell Your Myrtle Beach Investment Property:
The Property Has Negative Cash Flow
If you are losing money on your property every month then it’s probably not a good investment. Sure, it can be appreciating in value, but what happens when the market takes a downturn? The real estate market will always have its ups and downs, but timing it is the hard part. Never bet on appreciation at the expense of cash flow. Even a professional real estate investor with many years of experience can lose their shirt doing this. If you are consistently having to put money into the property every month or if you are having trouble keeping high-quality tenants, it might be best to sell it and put your money to work elsewhere. Investments are supposed to make you money, not cost you money. There are better investments out there, and using the cash from your underperforming rental is a great way to change your situation. And don’t settle for just breaking even, either. Even the stock market has earned an average return of 10% a year for the past century, at the time of this post.
You Are Long Distance Landlording
Trying to be a long distance landlord and managing property from out-of-state can be difficult to say the least. Hiring a local qualified property manager will take a huge weight off your shoulders, but it also comes with the added expense. Maybe you have a great tenant that’s been there for years, but what happens if they move out, lose their job and stop paying rent, or if damage occurs to the property? Trying to show the property to potential tenants, completing necessary repairs, tenant screenings, checking on the property, collecting rent, etc. can be difficult if you aren’t nearby. It can definitively work, but a good local property manager will make your life much easier. If the cost is too much to justify, it may be worth it to sell and buy another investment property closer to home. You can save in property management costs if you self-manage, and you will have your pulse on the local market to a much greater extent than a market you don’t live in.
The Value Has Increased Significantly
If you owned the house for a while and are able to sell it for a nice profit, it might be in your best interest to do so. There comes a point in any investment where you start seeing diminishing returns. After a while, you have to start thinking about how much you can earn on the money that’s “locked up” in the house. If you have a large equity position (the house is worth a lot more than what you owe on the mortgage), that money is really just sitting there not doing anything. Maybe you’re collecting $1,000 in rent each month and after all the bills are paid, you net $6,000 at the end of the year. It may sound great, but if you have $100k in equity in the house, your return is actually only 6%. Is it really worth the risk and the headache? While you could be collecting rent each month, slowly profiting over time, there aren’t any guarantees you will be able to retain high-quality tenants for the long-term. You may run into vacancy issues, the rent prices in your area may fall, and the overall value may drop before you decide to resell down the road. If you have the opportunity to resell the property at a significant profit, it is something you will definitely want to consider.
Labor Shortages and Rising Maintenance Costs
Currently, there is a blue collar labor shortage here in Myrtle Beach. Finding reputable contractors that are reasonably priced continues to get harder and harder. Not to mention the price of materials continues to increase. Lumber is basically triple the price of what it’s historically averaged. Costs of most building material has increased significantly. As the house gets older, it will likely cost more to maintain it. As you see your profits diminish and your repair bills grow, you need to ask yourself if this pattern will continue. Having to fix one thing after another can be extremely costly and frustrating. Not only can the maintenance get expensive, but the time and stress caused can be overwhelming for Myrtle Beach investment property owners. Your investment should be a sense of pride and generate income for you and your family.
Do you own an investment property in the Myrtle Beach area that you wish to sell? Let’s work together to run the numbers! Find out if you should keep the property, sell it directly, or hire an agent to help you! You have options when selling your Myrtle Beach investment property, and we are here to help! Find out How Our Process Works.