In the short-term rental riches will discuss investing in real estate with a specific focus on short term rentals quick action items to wire. Scale your portfolio I’m your host Tim Hubbard.

You can manage to the short-term rental riches podcast happier here again as always this week we’re talking about whether or not you should sell your property or more clearly for questions that you should always ask yourself before considering sign a property and you should always have the answer to and now sometimes we think we know why we want to do something but it’s not until we dig a little deeper that we uncover what’s actually driving us so I’ve got 4 questions for you today that you should ask yourself if you’re considering selling a property for questions I ask myself anytime I’m considering selling a property and this is for someone that’s got equity in a property so hopefully you’re not under water hopefully you got in at a good time and you bought your property right to start off with so. A lot of people are talking about selling properties right now I’m actually selling a couple too and so I’ve asked myself the same questions and one of the reasons a lot of people are selling or consequence sign is that prices are just so heart right they’ve gone way way up in a lot of markets now remember every market is different when we talk about real estate we’re really talking about hundreds of different markets so let’s assume you have equity in the property and you’re just contemplating selling this property well the first question is then this might seem just way too obvious but why are you selling the property I mean really why are you selling it is it because it’s been too much work is that not making enough money do you think that there’s maybe more opportunity somewhere else are you tired of the market are you hearing things in the news that make you think that maybe you’ve peaked in whatever area you have your property you really want to just take it I mean think about this honestly what why are you selling so that’s the first thing and it might be among multiple reasons but that’s really important because that’ll help us to determine what we’re going to do with the proceeds so once you figure that out the next question question number 2 is can you do better. With those proceeds somewhere else not not necessarily even in another property but if you’re selling a property and you’re and you’re getting all this money that maybe you had tied up what are you gonna do with it you have a better option already available or are you hoping to find one after selling the property so determine why you want to sell your property maybe you’re just fed up with it do you have a better place to put that money if you sell it and you take all the money and you’re hoping to put into a better opportunity but you don’t actually have anything to put it into well maybe you should reconsider cell in it right and that brings me to question number 3 that you should ask yourself if you’re considering selling a property and that is. Can I keep this property take out the money I’m hoping to gain after selling it and use that for whatever was planning on doing so if you have a lot of equity tied up in the property you can do a cash out refinance that’s a great way to have a better R. O. E. a better return on equity we call it now return on equity is simply how much equity you have in the property and the return that you’re making on the on the total investment so let’s say you have $100000 in potential equity and you’re making $10000 cash flow a year that be pretty darn good very possible short term rentals by the way that’s why that’s why we change a lot of our properties over short term rentals and the whole purpose of the podcast of course but let’s say you know this is a normal rental and maybe you’re making $1000 in cash flow a year off $100000 in equity you have one that’s only one percent right so that’s that’s not very good but if you can take that equity out still keep the property and still keep it with a loan that’s profitable. Then you can take that money and you can get a better return on it somewhere else and keep both your properties in your building wealth way quicker you have multiple people paying down your properties instead of just swapping one for the other my goal in the real estate world issues to continue building my portfolio to continue building walls to continue acquiring properties that’ll ultimately our tenants or our gas if they’re short terminals are paying off for us so that’s the old cement path to wealth with real state so really consider that if you have a property with equity already in it and interest rates are incredibly low right now if you can take money out of that property still have a cash flow and use that money for something else then in my opinion that’s a better option than just getting rid of the property. Where intermission thank you so much for listen in the podcast it’s been fun for me and I look forward to getting up so it’s out if you have a specific topic that you’d like us to talk about send us a comment and let us know you can send it to contact at rest methods.com and if you haven’t already subscribed and given us a review that would be greatly appreciated too and lastly if you know someone that you think would find benefit in this as well send it on over to help us keep growing and help us to get amazing content back to you without further ado let’s jump back in. Question number 4 to ask yourself if you’re considering selling the property and this is a huge 1 taxes if you sell a property you’re gonna have tax consequences 1 way or another we talked about 1031 exchanges in the past so we’ll put a link in the show notes to which episode that was that will allow you to defer your taxes so you don’t get stuck with a big bill but if you’re not planning on doing a 1031 maybe you just want that money to have a nice nest egg then you really want to talk with your tax professional and find out what kind of tax consequences you have from selling that property hopefully you found it more than a year and so you’re not going to be taxed at your ordinary income levels if if you voted over a year that will be capital gains tax but really really consider the tax consequences and you want to do this way in advance just let your tax professional now Hey I think this property’s worth this amount of money planning on selling that hopefully have an idea of your income for that year and then you can calculate roughly how much tax you were going to go. And number 5 this is just a bonus are you selling your property just to cash out and retire hole that’s always a good day that is a good day I promise though you’ll probably get bored at some point and then you’ll get back into real estate it’s a good good industry to ban and it’s a little addicted and I gotta say it’s addicting acquired properties but in a in a good way I mean a lot of times were renovating properties were making them better for tenants for making them better for gas that common we’re cleaning up neighborhoods it’s a nice feeling to have a a portfolio of with lots of people living in your properties that enjoy your properties and the same goes for short term rentals nice to have a short term rental portfolio with lots of guests enjoying your rentals so hopefully if you’re gonna sell property you’re either exchanging in into another one or you at least have some better option for that money the worst thing that we can do sign a property is selling it in hopes that we’re gonna be able to exchange it into something or invest in another opportunity. But not be okay with that opportunity not working now and being stuck with the cash so really evaluate that make sure you know exactly why you’re selling evaluate your opportunities can you actually invest this money better somewhere else and are you willing to put in the time to find those other opportunities can you possibly keep your property take the equity out and still achieve what other opportunity you’re considering and then lastly consider those tax consequences that’s a big one you’re selling congrats hopefully got a lot of equity hopefully you’ve done well and until next time have a wonderful day. Well you guys have been asking for it and I am so excited to announce that we have the dates picked out for our virtual event yep November 14 and fifteenth coming up we’re going to cover everything we did in our 2 previous live events but because of the time so we’re going virtual and I couldn’t be more excited you’re gonna get all the same info the systems the process is the tools and the secrets that I’ve learned managing now over 15000 guests and multiple cities and earning millions and passive income head over to rest methods.com forward slash virtual to save your spot looking forward to seeing you in just a few short weeks.

RELATED PODCAST EPISODES

• Episode 62: Professional Tax Advice From My CPA – Part 2
• Episode 61: Pro Tax Advice directly from my CPA (part one)
• Episode 56: Short-Term vs. Long-Term Rental? How Much Does it Really Cost?
• Episode 38: Is a Short Term Rental the Best Use for Your Real Estate‪?‬
• Episode 35: Quite Possibly the BEST Tax Break Ever (1031 Exchange‪)‬