If the income property you’ve invested in is not delivering the results you hoped for, consider some of these questions to clarify your next best move.
Is the location of your income property the best it could be?
Is your property in a growing area of the city? Are there companies opening their doors? What about business parks and medical facilities — how convenient are they? Has the population diminished in the last two years?
Tax benefits from buying or selling property
The new tax code could make it more (or less) beneficial to buy, sell or hold a property. Consider these factors:
• Depreciation: The IRS gives you the option of claiming depreciation benefits of your rental property as a way of reducing your tax burden. If claiming depreciation benefits lowers your tax rate, it may make sense to hold onto your investment.
• Section 1031: This section of the tax code lets you avoid paying capital gains taxes on income from sale of a rental property as long as you buy another property within 180 days. Note there are a lot of detailed rules. If you’re interested in learning more, ask your CPA.
• Reduced benefits for homeowners: The new tax code offers fewer tax incentives to own a home, so many people may choose to rent for a longer period of time. This could make buying additional rental properties a timely move.
Is the property management side of your investment stressful?
Whether you’ve retired to take it easy or you’re simply tired of the hassle of managing your income property, remember there are professionals who can manage it for you.
Cousin James Management has been caring for and managing investment properties for more than 25 years. We know a thing or two about the ‘big picture’ of property management.
Want to or Need to Sell?
If you’re faced with an unexpected need to sell an investment property, be aware of the best times to sell — usually the winter months. Or maybe you’re in an area that’s dwindling and property values are stifled. Better to sell and invest where growth is leading.