Should I hold or should I sell?

Comments(4)

• 
  DaveT13th May, 2003

  LynLinz,
  
  Why do you want to sell? If the property gives you a good positive cash flow, its future appreciation will only increase your wealth while your tenant is really paying your mortgage.
  
  If you want to sell just because you have untapped equity in the property, consider refinancing your mortgage loan to take some cash out.
  
  Are you just thinking about trying to sell on lease option to avoid spending more money on maintenance and upkeep? What will happen if sometime during the term of a lease option, you need to make a major repair? You are still the landlord, and you will still have to put some money into the property regardless.
  
  Your last question asked if it is a good idea to hold property until it is paid off. This implies that you would sell property once you own it free and clear -- I expect you really meant to ask if holding long term rental property is a good idea.
  
  I can only say that each investor's personal financial position will dictate the answer to that question. Personally, I would hold a rental property as long as it made good business sense to do so. I have some property in my portfolio that I bought in 1982, while I have already sold some rental property I had purchased four years earlier. I would say that it is time to sell a property when the cash flow no longer meets your income criteria.
  
  A lease option could be just one of the selling techniques you employ to divest yourself of a marginal or non-producing property.

• 
  LynLinz13th May, 2003

  Thanks Dave,
  So the main idea is cash flow I guess that is the secret
  Maybe I will reconsider I was thinking of a
  L/O w/ an inflated 2-3 yr price .
  maybe I wanted to practice my new found knowledge so when I get a tenant /buyer [from another sale] it would be easier
  As for holding I'm thinking when the property is paid off , all the income will be nice to have for retirement

• 
  DaveT14th May, 2003

  Yes, the main focus for the landlord is cash flow. But, then again, you are in the Landlord Forum where our primary investment focus is long term rental investment property.
  
  If you asked the same question in the Lease Option forum, you might have gotten a different perspective.
  
  I see nothing wrong with pursuing two different paths to real estate wealth. One path is your long term rental holdings that slowly increase your net worth while generating a positive monthly cash flow. The other path is a buy-and-sell strategy that puts quick cash in your pocket each time you complete a deal. This quick cash can be used to fund both your next long term rental acquisition as well as your next quick flip property.
  
  The idea is that at some point in your life, you may want to just relax and not have to chase another quick flip deal to meet your lifestyle needs. When you have enough rental property producing enough passive income to meet your lifestyle needs, then you can choose how and when you participate in another deal.

• 
  j_owley27th February, 2005

  how many times has it been said "cash is king"
  
  John