Are you getting the returns that your portfolio should be getting? If done right, investments in real estate, such as rental properties or homes you are hoping to sell, should result in large returns. But it is not always the right time to sit on a property, just as it is not always the right time to sell. So how do you know when the right time has come?
Hold or Sell?
Knowing the right time to sell is a huge factor in the overall return on your real estate investment. This applies to any property, but if you are seeking to maximize returns, selling in a seller’s market is crucial, particularly if buyer demand is also high. Selling at a peak ensures that you will get the most out of your investment, especially since demand or home prices can fizzle out if you wait too long.
Diversify Your Portfolio
Diversifying your real estate portfolio, as my blog noted last month, is a great way to protect your investments from downward market trends. In real estate investing, you can do this by investing in multiple markets. If you have a beach house that is being rented in a vacation hotspot, for instance, that can be held while you sell an investment property in an emerging urban market.
If your investment property is worth more now than it was when you bought it, it is a good time to sell. That’s investment 101, but it is still useful to think about. While you could wait for the home price to keep going up, it is not a guarantee that will happen. By selling the property you currently own and reinvesting in another, you can get a great return on your investment and continue to diversify your portfolio, which in turn continues to protect your investments from negative market trends when they occur.
If you are interested in diversifying your portfolio, or you are curious as to what to do with your current portfolio, I invite you to contact me so we can discuss the best strategy to maximize your returns or start building a strong investment portfolio in the first place.