How to sell rental property
Why You Should NOT Sell Rental Properties
0:00 / 0:00
Timecodes:
what's going on guys this is chandler
smith and in today's video i'm gonna
explain
why you should never sell your rental
properties and if you stick around
i'm gonna share the couple rare
instances where it does make sense to
sell so with all of that being said
let's jump into it
[Music]
alright guys if you're new to the
channel my name is chandler smith and
i've been investing in real estate for
the last
eight years i actually purchased this
property a couple years back
and i decided to start the video here
because i picked up this property for
just a little over three hundred
thousand dollars now if i were to turn
around
right now and sell this property i'd be
able to sell it for
over 450 000 now i'm sure a lot of you
are saying chandler if you could sell
this and make over 150
000 on the cell why would you not do
that
and so in this video i'm going to share
with you all the pros and
cons of selling and why right now it
makes no sense
for me to sell this fourplex now i would
stick around for this fourplex
however we've got to run some errands
we're gonna hop in the car the first
reason is i wouldn't have a good place
to put that money
if i did sell the property and i'm not
in need of that money so essentially i
would be selling it
to bank that money in hopes that i could
find another property when i've already
got a property that's going up in value
that's cash flowing
that's getting good principal pay down
and giving me good tax benefits which
we're going to talk about all of those
because those are reasons to hold on to
the property as well but
if i don't have a place to put the money
it doesn't make sense to sell now i'm
working on my deal flow problem for
right now i have more money to place
than i have places to put it so that's
the first reason i want to hold on to it
is
i would need another place to put it and
right now i don't have one
the second reason is the things i kind
of just mentioned but
all of these properties are cash flowing
consistently they've been stabilized
the rents have been maximized and that's
consistently coming in
every single month so it's really hard
to just walk away from something like
that now you're probably wondering what
i'm up to
but i wanted to check in on this wall as
you can see we were able to get
everything
fixed we were able to save the window
but now they're in the process
of getting everything re-sheeted so i
just wanted to come check in and give
you guys the update but let's go on to
the third reason
also if you're wondering why it's taking
us so long to get this fixed it's
actually because we're working with the
person that ran
into it we're able to track them down
and their insurance is going to pay to
fix it
but we're trying to see if we can get
them to replace the entire wall
and the window rather than the damage
that we already replaced
because if that's the case then we can
fix the window we can also put new
siding on this whole area
because it's going to be really hard to
find siding that matches and so if
insurance is willing to do that then
that's going to be awesome
the next reason i want to hold on to
these properties is my actual
percentage return on them is
substantially higher than when i even
originally ran the numbers at what i
thought it could be for example
if i thought i could get rents up to 800
on a property that i purchased three
years ago
i can now get rents up to 900 or a
thousand and so my initial investment
is getting a substantially larger return
than it was when i purchased the
property some would argue
but chandler your properties have gone
up in value so technically you're
getting a lower return
because you have all of this equity and
you are right which leads to the next
reason that i love holding on to these
and that is security
now i not only have 25 down that i put
in but i have this extra 150
000 in equity in this property now could
i pull that out
yes i could but if i don't need to it
gives me the warm fuzzy feeling
knowing that now i'm up to 30 40 50
equity on some of these properties
because of what we've done with rents
i'm getting a much higher return
on the actual money i put into them but
i also am in
an equity position where property values
could drop like crazy
and it would suck but i'm still
extremely comfortable cash flowing
extremely well
and so that's kind of the thing that
gives me comfort at night
the last reason is probably the reason
you expected me to talk about the most
and that is the tax benefits that these
properties provide because every single
year
you get to take depreciation against the
properties that you purchase
which is another huge benefit so now
you've got the cash flow you've got
depreciation you've got the principal
pay down
you've got all the tax benefits and you
have the realization that hey maybe i
don't have a better place
to put the money if i were to take out
of these properties and so these are all
the reasons that i hold on to my
properties now if you're wondering
chandler will when
is a good time to sell the truth is
there are some
great times to sell and waiting until
you can capitalize on a great market
like
right now it would make sense to sell if
a couple things
had fallen into place thing number one
if i had used up all of the depreciation
on that property now the other reason
that it might make sense to sell a
property is if you're flipping
properties you're buying them you're
adding value you're selling them and
you're moving that money into new
properties
but for me i don't have the kind of deal
flow right now that i need
to be able to do that and to justify
doing it without taking advantage of the
tax benefit so for me
what i would need with my strategy is
not only to milk out all the
depreciation not only get to the point
where i know i have a deal to move this
money into
but then make sure i do a 1031 exchange
so i'm not paying
any taxes on the profits that i'm taking
from one property
and moving it into another if i could do
that then it would make sense to sell
because then i've milked all the
depreciation
and i'm moving it into another property
because i have good deal flow
and i'm doing it without paying any tax
on those profits
all right guys i've covered all the pros
and cons of selling your property i've
helped you understand why i don't sell
my properties but also the exceptions
where it would make sense with my
strategy
to sell now if you enjoyed this video
make sure you smash like button
subscribe to the channel
and hit little bell and if you've
enjoyed following my channel i do want
to give you a little heads up
i am looking right now at two four
plexes that i am in the middle of due
diligence on i'm actually going to walk
over and finish the inspection that
we're doing on them
i didn't want to spoil the surprise or
show it on the youtube channel
until it is 100 locked down because you
never know what can happen however
it is coming so there are gonna be more
purchases on the channel
i hope if you guys have enjoyed this
video make sure you hit that like button
subscribe to the channel hit the little
bell
but also let me know in the comments
what you'd like to see in the future
videos
on this property that i'm purchasing
finally if you enjoy these videos and
you want to learn more you want to
connect with other like-minded investors
make sure that you click the link in the
description where you can go and join my
free facebook group we've got
tons actually almost 2 000 real estate
investors on there
we bounce a ton of cool ideas you're
gonna get early updates about the
properties i'm purchasing
some of the moves i'm making and some
incredible moves that other people in
the group are making
so make sure you go hop on there and if
you love the content you can also pick
up my real estate investing course
you can use the link in the description
for 50 off and in that course i give you
a step-by-step process on everything you
need to know
to be able to purchase real estate and
build a huge passive income so again if
you enjoyed the video
smash like button we'll look forward to
seeing you in the future videos thanks
[Music]
guys
