All over the country people are thinking about the sale of property for quick cash. It is often because of a new Duane Reade, Walmart or food chain. You hear rumors for a long time that this was the eventual plan. The area has gone through substantial improvements including a PGA style golf course, and improved access with better roads. Small strip malls also complemented the improvements. I personally have always dismissed this kind of stuff; saying to me there is no validity to those rumors. Mostly because when I have approached the officials whom would know of such a plan, they declined any knowledge.
Even with the infrastructure improvements the property values rose like a bat out of hell in the mid two thousands, and also took a sudden dip as well, primarily linked to a few novice investors that bought too high, overextended themselves and had to foreclose on their properties. Sell? Right now? Hmmm…. Before you do anything, evaluate the pros and cons of sale.
Most property is need to be evaluated in terms of cash flow when it is fully rented. For many rental property is part of the overall game plan of providing an income when you decide to walk away from the corporate grind of a job. Sell? Right now? No way. Decreased market values, along with lower demands would make an investor decides to hold and ride out the wave. But hold on.
I hate to say this, because it sounds so capitalistic. But let’s face it, everyman has a price. Any corporate entity that wants to buy up the entire lot of investment properties along the stretch and use the land to develop a first class hotel along with high end shopping stores will win one way or another. And to be honest, it makes a whole lot of sense. If your area is primed for such a development. There is a saying in real estate that you have to use the land at hand for the appropriate use. This stretch of land is ideal for that use.
Here is what you must think of :
- Capital Gains: Uncle Sam will definitely have his hand in my back pocket if I made a gain.
- Sellers Remorse: Would I miss unclogging toilets, and threatening tenants who are late with the rent?
- Cash on Hand: would you have a nice piece of cash on hand.
- 1031 Exchange: Should I take the earnings and buy up into a larger apartment building?
Most of all remember to live in the present. Until that corporate entity knocks on the door, it is still a rumor. Maintain and sustain.