Buy and hold isn't the only way in real estate investing - should you consider selling?

Buy and hold isn't the only way in real estate investing - should you consider selling

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For many people, being a property investor or real estate investor means buying and holding property. Often we have been conditioned to believe that you must hold onto all of your properties and never, ever sell. Although selling properties does cost money,there are some circumstances, however, where selling a property may be warranted and may be a beneficial course of action for a real estate investor.

We recently reviewed our buy-and-hold strategy. Having invested in property for over ten years now, we had never even considered selling before. Circumstances, however, have recently had us thinking about this. Before rushing out and selling up, though, one needs to seriously consider the following factors when deciding whether it may be time to sell:

1. Have a good reason

This the key question. Selling a property costs money so you must ask yourself what do I stand to gain from selling this property. Here are some potential reasons:

* You wish to reduce your debt obligations - the property may be causing you financial hardship by continuing to own it or you may be just wanting to sleep better at night with less debt or cash out of your personal debt and leave only investment debt remaining.

* The property is underperforming and you are losing money consistently. Sometimes in property investing you just get a lemon! Continuing to sit on it hoping it gets better will sometimes payoff but there are other times when you may just want to bail out.

* You wish to realize a profit - you may wish to or need the money for some other reason, or even potentially to leverage into another more profitable real estate deal.

2. Pick a good time.

If you are not in an urgent need to sale situation then it pays to have a look at what the real estate market is doing to determine if it is a good time to sell. If you are in a need to sell situation you may not have a choice, but if you have the luxury of deciding the timing yourself then this is helpful. Look at the general economic situation and the property market in general as well as the localized area market situation.

3. Pick the right property.

If you have a choice between properties to sell then make sure you assess the pros and cons of each to decide which is the right one and that selling it will meet your goal. Not all properties increase by the same rate, at the same time, in the same area.

So keep an eye on the market and ensure you know what your properties are worth, which will put you in a position to be assessing whether selling may be worth considering - with a good rationale of course!

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