Coldwell Banker Residential Brokerage
Liza Vernazza, Coldwell Banker Residential BrokeragePhone: (650) 218-8040
Email: [email protected]

When to Sell Your Home as an Investment Property

by Liza Vernazza 03/08/2020

Photo by fran hogan on Unsplash

If you’re a homeowner considering selling your home as an investment property, timing is important. From a financial perspective, just as you probably bought strategically, you want to sell strategically too. The trick is knowing when the right time arrives. Here are four common metrics people use to determine when it's time to sell their property.

Amount of Equity in the House

A primary factor to look at is how much equity is in the home. Ideally, to sell a home as an investment, the seller can make a tidy sum. If mortgage payments are still owed, this may negate any potential profit made, but not necessarily. If you're looking to broaden your investment portfolio, be certain you can sell your house for enough money to pay off your debt with a sufficient amount left over to re-invest. If you don’t have enough equity to do this, you’re better holding off.

Market Conditions Are Good

Many owners who bought low and can sell high find this to be a strong motivator to put their property on the market. Since market conditions eventually shift to a buyer’s market, it’s a smart strategy to sell when the housing market favors the seller. Owners who have held their property for a long time or purchased as the housing bubble burst between 2007-2012, are likely going to make a better profit than investors who purchased when prices were at their peak.

Tax Code Advantages

Buyers are often motivated to sell if there are tax code advantages. For instance, the IRS currently offers a tax-deferred advantage to investors looking to sell one property to buy another. Under tax IRC Section 1031, sellers are required to find another property to purchase within 45 days and then buy it within 135 (180 days total).

By selling and making a similar real estate investment, investors can defer paying their federal and state capital gain taxes. It’s a good strategy to use if you want to leverage real estate and broaden your portfolio.

Taxes Are Going Up

If local taxes are going up, often buyers find this to be an incentive to sell. For instance, if a town severely limits commercial activity, the tax burden falls to homeowners. Over time, the tax bill may become too exorbitant. If you own enough equity in your property and the housing market is in your favor, high taxes might be your tipping point.

About the Author
Author

Liza Vernazza

Since 1988 Liza has assisted her clients and friends to realize their dream of homeownership. Whether it be a small condo or a large home, with her strong people skills and negotiating skills, she has assisted them to buy or sell the property of their choice. 1031 Tax Deferred Exchanges, First Time Buyers, Move-up buyers and sellers, Probate and Trust sales are just a few of the types of transactions Liza is experienced in. Additionally, she has successfully represented investors, short sale transactions and bank owned or REO properties. If you are looking for a Realtor that is current with the market, give Liza a call and see the difference!

Education:

Liza recieved the Lifetime Million Dollar Club Award in 1990 only after two years in the Real Estate Business. As a graduate of Anthony's School of Real Estate and a member of the California Association of Realtors, National Association of Realtors and the local SAMCAR Board of Realtors, Liza is always actively pursuing educational opportunities to enhance and further her knowledge of the real estate business.

Professional Philosophy:

"I pledge to earn the loyalty of you, my client, and to be sensitive to your concerns and your needs. I will give you 100% of myself and I will share in your enthusiasm and excitement of finding that special home or marketing your old home. I have a love for my work and continue my education to strive for excellence."

Personal Background:

Liza has lived all her life in the San Carlos and Redwood City area. She is married with two beautiful children and one dog. Currently living in the Emerald Hills area of Redwood City, Liza has been an active volunteer and supporter of Roy Cloud School and and is a current volunteer and a member of the Parent's Association at Notre Dame High School.

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