Better to sell RE in 2024 or 2025?

[eddy20]

Just thinking of selling some rentals, been land lording for over 40 years and tired of the management. As I look at the numbers, just keep wondering if better to sell this year or next year when maybe things are decided? President and interest rates and inflation, any thoughts?

[Paper Chaser]

If you've been a landlord for 40 years and are tired of it, what's the benefit to waiting a few more months? MAYBE you get a few thousand more dollars if the property appreciates? Is that money meaningful at this point? Is that amount of money worth the risk of the market falling, or the hassle of owning/operating/managing for another year or so?

[Villanelle]

Don't try to time the market.  If you are ready to be done, be done.

[SilentC]

Well, anything can happen.  I remember the Fed was going to pivot in 2023 and mortgage rates were going to fall.  A realtor you talked to said they were going to cut five times this year.  Now a first rate cut in June is about coin flip odds based on forward rates.  My fear would be, if the rate cut “can” keeps getting kicked down the road, buyers and sellers will start to assume 7% mortgages forever instead of assuming a refi opportunity is just around the corner.  That could freeze the secondary home market and selling could be an enormous headache (even moreso than currently).  That’s the downside risk to waiting.  The upside is they pivot and mortgages fall and Goldilocks happens, but in that case home prices may still not go up.  It is possible if rates fall enough it could cause prices in some segments of the market to fall.  It’s not very intuitive but if the “lock in” effect breaks it’s possible that supply increases in more affordable segments of the market.

Edit - I’m apparently not crazy, Third Point just wrote in letter to investors they expect home prices to fall if rates fall and housing turnover increases. 

[reeshau]

Now is not a bad time to sell.  Who knows what 2025 will bring?

I'm in the camp that it's time to call it a career, and move on to better things with your time and your money. With a lack of housing inventory for sale, it should bring a quicker offer on your properties.

[Metalcat]

The best time to sell is when the hassle of not selling outweighs the hassle of selling.

If you're at that point and your property value isn't prohibitively low to sell, then sell it now.

I sold a property right before property values shot up. It doesn't bother me because I sold at a very, very good time for our personal needs.

That was right before the pandemic, and frankly, pandemics are unpredictable and property values could have plummeted instead of sky-rocketed. I feel no personal loss that my former property could have sold for more a year or two later.

I didn't have to deal with being landlord through the pandemic when all of a sudden tenants rallied in my community to stop paying rent and the laws changed to allow them to do so.

I sold when my unit was empty, easy to repair, easy to stage, and easy to sell. Had I sold a year later, I may have sold for more, or maybe not, because perhaps I would have had shitty tenants who sabotaged my sale, knowing that selling could get them evicted.

My point is that even knowing that values jumped right after I sold doesn't make it a slam dunk that I should have waited.

If now feels like the right time to sell and the unit value is high enough to make it beneficial, then sell. Move on.

[Midwest_Handlebar]

I'm in the process of selling two that have appreciated roughly 80% in 3-4 years. Never bad to take chips off the table if you have other uses for the money.

[FINate]

If you wait to sell in 2025 you'll have N reasons it may be better to way until 2026. And so on...

How would you feel if something happens over the next 12 months making it difficult to sell? I got a great deal on an investment property in 2013 where it was obvious that the previous owners were done being landlords but waited too long to sell, then the financial crisis hit, and the property repeatedly went on/off the market over a period of years with multiple price reductions.

[lhamo]

How many rentals? Why not sell them off one at a time over the next 2-3 years. Mitigates your risk.

[clarkfan1979]

Just thinking of selling some rentals, been land lording for over 40 years and tired of the management. As I look at the numbers, just keep wondering if better to sell this year or next year when maybe things are decided? President and interest rates and inflation, any thoughts?

I have 3 rentals and a primary. I haver never sold. However, when selling a rental property, I personally don't feel like there is much risk making it look nice and putting it on the MLS. If you have a specific number in mind just hold your ground. If you don't get the number you want, pull it off the market and re-list the following year.

For tax reasons, it is probably not a good idea to sell more than 1 property each year. You could sell 1 each year until they are all gone. Sell the difficult properties first and the easy one's last. You mind find yourself keeping the last 2 if they are really easy to manage.

[monarda]

As others have said, you just need to sell if owning is inconvenient.

I like the suggestion to sell the pain-in-the-butt ones first and keep the easy ones for a few more years.
And for risk mitigation.

Our story, we bought a house in 2006, (130K), lived in it until 2008, rented until 2019 when we sold it (155K).
So we barely broke even on the price. Today's Zestimate is 251K.
A lot would have changed if we'd put it on the market now instead of 2019. But we wanted to get rid of that place. It was the hardest one for us to manage.  Glad it's gone. We had need for the funds in 2019, and the idea of having that property during the worst part of the pandemic did not appeal to us at all.

We still own two rentals, we've owned those for 24 years now, and we'll probably keep them at least another 10. But I know which one we'll sell next, the one that's more of a PITA.