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To Sell or Not to Sell…That is the Question!

November 17, 2016
Being in the Real Estate industry, the number one question I am asked most frequently is, “Is this a good time to buy/sell?” Being the guy that wants to be your trusted resource and one you can lean on to make your Real Estate decisions, I struggle with giving this question an answer a lot!

So here is the mantra I constantly refer to when it comes to questions and/or scenarios like this: “Don’t try to time the market, let the market time you!” Its that simple. If it makes financial sense to buy, then buy. If it makes financial sense to sell, then sell! But for those that want more from me than this high-level advise, let’s dive in further…

et’s talk about the market today.  As you can tell from the table to the left, we’ve had some pretty great growth over the last handful of years!  So if you bought property locally in 2011, the market’s timing was in your favor.  In fact, if you purchased anytime in the last six years you’re sitting in a great position!  But where are we headed?  That’s the million dollar question, and the truth is, nobody knows for sure.  The only thing we can do is to study the past and present and make our best educated guesses.  Which is where I am currently sitting with a few of my properties within my portfolio today.  They have appreciated along with the rest of the properties locally, and I am now looking at unrealized substantial equity gains that could be captured and re-purposed should I decide to sell them in today’s market.  And so, the question I keep pondering is, “Are we near the top?”


Real Estate is on a continuous cycle.  Its almost always moving up or down, just seems to do so at different speeds in different portions of its cycle.  I’m sure most everyone remembers how fast it moved through 2002-2009.  It moved very fast in both directions up, and then down!  And although I say it moved fast, the reality is that it moved up for roughly five years, leveled off, and then down for roughly 3 years.  So fast is a relative term here.  But using the last cycle as a reference to the present cycle, we’ve had growth years from 2012-2016, five years.  And from the table referenced above, the median home price seems to be appreciating at a slower percentage than previous years.

Could this mean its starting to level off at the top?  My gut tells me that we’re not going to see the same kind of drop as last time, much like this last rise.  It has been slower and less dramatic than the previous up-cycle.  But I do feel like the market is showing me that its starting to level off.


So back to the questions at hand.  Do I buy now?  My short answer is no.  Not unless the deal cash-flows and makes financial sense to buy and hold for the long run.  This is not a time for speculation and trying to time the market to make a quick profit.


Do I sell now?  If you have a place to put the cash from the sale that will safely generate a decent return, I say yes.  That’s my plan with a few of my properties I currently hold in my portfolio.  In fact, I’ve just closed escrow on a condo that I purchased in 2012 for $150,000.00 and sold last month for $232,000.00.  I’ve taken the cash and placed it into another escrow to purchase a four-plex that should be closing within the next 30 days or so.  It gives me four doors for the price of one, creates monthly cashflow for my family, and provides better leverage with bank financing than the condo had.  This is the win-win scenario I’m constantly looking for.


I hope this post helps you progress in your Real Estate Investing journey!  Remember, one step at a time…

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Having clear communication with your tenant is essential for maintaining a healthy landlord-tenant relationship. By being transparent in all relevant interactions, landlords can prevent misunderstandings while resolving repairs and disputes efficiently while improving tenant satisfaction. Having good communication with your tenant is beneficial for landlords too. Effective communication also protects your investment property. Remember that while your tenant is living in the property, landlords need to take care of the repairs. Below are the three best things to do during tenant communications. Prompt Responses Addressing tenant concerns quickly is essential for building trust and maintaining a positive relationship. Tenants feel valued when landlords respond quickly, knowing that their needs are being prioritized. Building this trust not only enhances your tenant’s satisfaction it lowers the possibility of conflicts or misunderstandings to arise. This ultimately creates a healthy and successful rental experience for you and your tenant. Some of the most common inquiries will oftentimes include repair requests, among others. As an example; if your tenant reports a leak under their faucet and the repair is delayed, this can be damaging to your landlord-tenant relationship, as well as your property. If left ignored, that leak can result in hundreds of dollars in water damage and a vacancy . Which can further affect our bottom line negatively. For landlords with multiple properties, this can become difficult to keep track of. A property manager can help with scheduling repairs and communicating with your tenant on your behalf. Document Everything Keeping a detailed record of all interactions with your tenant is an important element when managing a property. There are many choices for documentation including email, text, or written notices. Although many property management companies and landlords have opted to use apps or dedicated tenant portals to log communications. A great example, for instance, a tenant may claim they’d reported a repair issue that was never addressed, if everything is to be documented, both you and the tenant would have a copy of the request. Maintaining transparency with tenants. Having thorough documentation ensures agreements and requests between all parties are clearly tracked. Documenting communications with your tenant provides landlords with a foundation for addressing misunderstandings, or disputes if and when they arise. Provide Regular Updates Regular updates show tenants that their landlord is organized and has an attentive approach to managing their property. Giving tenants ample time for maintenance, inspections or policy changes is a simple way to build trust with your tenants while showing your professionalism. Giving tenants advanced notices reassures them that you’re aware of how changes can affect them and you understand that time might be needed in order to adjust. Surprises are best kept for birthday parties. Proactively notifying tenants of changes helps clear the communication channels and minimizes disruptions which helps tenants feel valued and satisfied. These small yet consistent efforts can contribute to a positive tenant stay, which can encourage lease renewals and long-term tenancy. Additionally, having a good relationship with your tenants can give you a great reputation which can provide you with leads when looking to fill a vacancy . It cannot be understated the importance of communication for a healthy landlord-tenant relationship. Even if your tenant may not agree with some of the decisions a landlord needs to make, by giving your tenants ample time to process the change tenants generally are more accepting of said change. If you’re having trouble communicating with your tenants or if you need help managing Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our Owner Application online .
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