Early on in the Coronavirus pandemic, there was a huge drop in demand for rental properties. However, that temporary drop was more than made up for not that much later on. There has been a subsequent surge in demand that is turning the present day into a golden opportunity for property owners!
This huge surge in demand can potentially increase both the value of a property and the profit it will bring in through rent. Many landlords are considering selling properties in response to this shift in the real estate landscape. However, many landlords have focused on making their money through rent and are unfamiliar with rental valuation and the selling process.
So how can you make sure that you make the right choice with your properties? Read on to learn about a few reasons why it might be better to hold onto your property is!
Capital Gains Tax
Many landlords are used to enjoying the benefits of depreciation when they are filing their taxes every year. However, all of the money that they save year after year through depreciation has to be paid for when they sell properties.
Depreciation recapture and capital gains taxes can cut huge amounts of money out of how much you will make from selling your property. High rental valuations can lead to huge tax costs. If you are not sure if selling or keeping will be more profitable, don't forget to account for these losses to taxes if you sell.
You Know Your Property
At the end of the day, there is a certain amount of uncertainty whenever you abandon old strategies that have worked well for you and try something new. That doesn't necessarily mean you can't do something new. But it does mean that you need to be prepared for unexpected difficulties.
After years of real estate asset management, you know your property. You understand the relevant rental property accounting and how to use owner statements.
Selling your property means entering a new arena. You won’t always know everything that is going on. However well it looks like things will go, there is a good chance that something unexpected will cause a little bit more trouble than you thought.
Turnkey Property Management Options
Many owners consider selling properties because they are tired of dealing with the tenant background checks, maintenance costs, and other aspects of maintaining a property. However, a turnkey property management service can eliminate these problems without you having to sell a property.
A quality property management service can manage tenant criminal background checks, maintenance and cleaning needs, and everything else that can make rental management a hassle.
Appreciate Your Rental Valuation
We hope that this brief article on various aspects of rental properties has been helpful for you. If you have a system that works for you, it is often safest to stick with it. Making the wrong call with rental valuation and selling a property can haunt you for years to come.
To learn more about how to manage the property as you have and make the most out of them, you can get in touch with us here!