There are a lot of differences between buying a home and buying an investment property. There are, however, also quite a few similarities. One of those similarities is that you need an exit strategy from the property.
This means that you need to be able to identify when the time is right to sell your property.
Does your property meet your needs?
Deciding whether to sell a residential property can be a lot simpler than deciding whether to sell an investment property. The key question you need to answer is whether or not a property still meets your needs.
If it doesn’t then you need to look at whether or not there are any ways that the property can be updated/adapted to meet your needs.
If there are, then you need to look at how these options stack up against moving to a new home. If there aren’t then your decision is basically taken for you.If the property doesn’t meet your needs and there’s no way to change that, then you have to move.
Can you afford the property?
This is really part of the issue of whether the property meets your needs. It is, however, important enough to be worth highlighting on its own. If you are struggling to pay your mortgage each month, then you need to take action.
The alternative is having action forced on you and that can be even worse.
If you are fairly happy to move then it may be worth just looking for real estate agent and getting on with it. If, however, you’d like to stay in your property then you need to see what you can do to make ends meet, preferably with a bit of breathing room.
The first point to check is that you have put your finances in the best possible order. If you have, then consider whether a bit of lateral thinking could resolve your situation. For example, if you think you’ll be happy to move in a few years, then perhaps you could switch to an interest-only mortgage until then.
If you’d like to stay in the property for longer and/or build up equity in your home, then you might want to try monetizing it in some way. Possibly the most obvious way is to rent out a room.
Depending on where you live, however, there may be other options such as letting out space on your driveway for parking.
When is the best time to sell?
If you come to the conclusion that it’s best to sell your home, then you need to think about the best time to do so. Most housing markets will have seasonal peaks and troughs. In most years, they tend to be at their busiest in spring and their next busiest in fall. Summer and winter tend to be relatively quiet.
Peak periods are the times when buyers are likely to be most active.
On the other hand, they also tend to be the times when there’s most competition. You, therefore, need to weigh up the pros and cons of each selling season as well as thinking about what fits with your lifestyle.