It’s important to know when to cut your losses on an investment property in Metro Detroit. In our latest post, we will help you find out if it is better to hold onto the property or walk away.
Often times, people will purchase an investment property, holding on to in even when it isn’t performing. While in some cases, it is best to hold on and enjoy the ride, in other cases, you will want to determine if getting rid of the property will actually be the better choice. Sometimes, it is better to cut your losses and walk away as opposed to dealing with a property that isn’t working out for you.
Consistently Bad Tenants
If you can’t seem to find a good tenant, there is likely a reason why. Either a bad property or a bad location will cause you to attract lower-quality tenants. This causes turnover and almost assures you will lose money. If you can’t seem to find a good tenant, if you are tired fo people moving in and out, and if you are sick of paying for tenants screenings, selling off your Metro Detroit investment property may be the right choice for you!
You’re Not Seeing A Profit
While this might be a no-brainer, not seeing a profit right away isn’t a sign you should just get up and walk away. Property values go up and down, as does the demand. If it makes to hold the property while the market rebounds, then by all means, do so. Just like the stock market, real estate values go up and down. If you aren’t receiving a profit today, that’s not to say you won’t in the not so distant future.
Deciding to sell your investment property in Metro Detroit, should only be done after your efforts have been exhausted and you have determined that the numbers simply aren’t there. You can’t just hope things will get better for your Metro Detroit investment property. You need to follow the numbers and reinvest where it makes more sense for you.
There Are Better Opportunities Available
Are there great opportunities out there that keep passing you buy? If you have capital tied up in a property that isn’t performing, you could be missing out on some serious profits. Don’t allow yourself to get stuck with an underperforming property, while other real all the rewards. If you see a lot of action and growth in your local market, while you are simply sitting stagnant, you may want to consider putting your money elsewhere.
Now we’re not saying that you should immediately sell just because there is a better opportunity here or there. The market is always fluctuating, with property value and demand rising and falling. If you are seeing a nice profit, you don’t want to jump the gun because you see something that is only slightly better.
Is There Potential?
Does the property in question have potential? Maybe a few small upgrades could increase the value? Or maybe you haven’t been increasing the rent as you should be, and have found yourself priced well below market. Take a look at when your tenant’s lease is up and how much you can realistically raise the rent without your tenants wanting to move out. Investors will often get stuck in their ways, never raising their tenants rent as they should be. The potential value of the property can be much more than you are actually seeing. Make sure you are doing everything you can to maximize the value of your investment.