The Art of the Sale

To sell or not to sell?

Analyzing strategies on when to dispose (sell) of investment properties.

One of the benefits of owning investment properties is that it allows investors to build substantial wealth over time through build-up equity (appreciation and debt pay down). Investors, who naturally see equity and cash as opportunities to invest more, often debate whether or not to liquidate parts of their portfolio to fund further ventures.

Deciding whether to sell or not is a matter of mathematics, economics and experience. In my opinion, selling an investment property, which yields a 10% return per year for example, would have to allow me to pursue other investment options which have a higher yield. Otherwise it wouldn’t make sense, would it? Why sell something just to make a worse return?

For economists, the term “opportunity cost” is often used to describe this conundrum. The opportunity cost of investing in one property is the lost opportunity of investing in another. Investors in that regard should always be looking to maximize their net worth growth and cash flow.

Personal reasons and taxation are also factors to consider when selling investment properties.

If you ever have any questions about selling rental properties, any at all, please don’t be shy. Give me a call or send me a text or email. I am always willing to chat real estate over a cold beer or strong coffee.

Brock Frost