How Do I Know When To Sell?
When thinking about selling your commercial property, keep these four components in mind ...
If cashing in the tax advantage of depreciation is what is keeping you from selling your commercial property, it may be time to change this thought. When analyzing the tax advantage itself, it has been known to be very minimal in contrast to the financial benefit of selling your property.
Leveraging and ROI
If you are leveraging your property, there is a chance that you have underleveraged it to avoid losing money from overleveraging. By doing so though, you are lowering your return on investment. If you were to sell the underleveraged property, you could then channel the funds you were using to leverage into another property that performs better, thus increasing your ROI.
Changing Investment Goals
As with everything in life, things change. When you invested in your commercial property, you probably had a clear goal in mind, and had a plan in mind to achieve that goal sooner rather than later. Because things change, your investment may no longer be appropriate to achieve your goals, and it’s probably time to let go of your property.
Earning potential is the most obvious factor as you decide whether or not to sell your property. If you are losing money regularly, then it is time to sell. At this point, your property has lost its potential, and someone else may be able to tap into what is left of this potential, and you can either reap the financial rewards of selling your property, or use those rewards to reinvest in another property.
7077 E. Marilyn
Scottsdale, AZ 85254