When does it make sense to sell a good cashflowing property?

Question

I currently have a 5 untit apartment complex, and im purchasing 2 single family homes next month. When wouldnit make sense to 1031 these properties into other properties?

Todd Rasmussen · Answer

@Nathan Marks

When the opportunity cost of holding them exceeds the return you see from owning them.

Joe Villeneuve · Answer

When your equity doubles (plus...to cover closing costs).  The double equity allows you to duplicate your cash flow, property value, and thus appreciation from that point forward.

Steven McCutcheon · Answer

@Nathan Marks

Opportunity cost is the easy answer. When you think you can make more money in another investment. Maybe you want to upgrade to an apartment building, you know capex repairs are coming, or just want to cash out and enjoy.

It’s whatever your pain points are going to be!

Dave Foster · Answer

@Nathan Marks, The pain points will speak to you - Cap ex is looming.  You're wanting to go bigger/smaller/different geography/different class of real estate, Your roe gets low, a meth lab opens up next door..... the list is endless.

If at the end of every month you cash your check with a smile then keep it.  If that check ever starts to look small compared to the hassle then it's time to 1031.

Nathan Marks · Answer

Thanks everyone,  in my mind if a property was paid off and cashflowing extremely well, i ddint thinknit would ever make sense to sell, but i could see when a major repair or investment might be needed would be relevant.

Michael Plante · Answer

Can you make more money investing the equity elsewhere?

Lien Vuong · Answer

@Todd Rasmussen said it perfectly. Make sure you understand what you can buy with that capital before executing.

When does it make sense to sell a good cashflowing property?

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