When to Hold & When to SellJune 23, 2014
Most good investors know that every investment needs an exit strategy. Awareness of current market conditions is often the make or break factor when it comes to¬†differentiating between a great opportunity and one that is mediocre. It can also be¬†an excellent indicator of one that has soured due to obvious signs of trouble that were¬†ignored.¬†
While there are a variety of resources that can be used to track the local market, the numbers that surround your specific piece of Northwest Florida real estate¬†are even more important. This includes not only larger market trends, but how your income property performs within those trends.¬†
So, how do you know when to hold ’em and when to fold ’em? It typically depends on cash flow, ROI and cap rate. In general it may be time to sell if the cap rate falls below your debt’s interest rate or if even if the property value has increased.¬†
There are numerous ways to crunch the numbers, but the conclusion drawn should be based upon opportunity cost. Ultimately, it is important to realize whether or not your money is being put to its best use.¬†
For more tips on how to sell your home, contact a RE/MAX Southern agent today.