Capetalizing in a frothy market...or play the long game?

[Maria S.]

For those of us committed to the buy and hold approach. Frothy markets make it tempting to sell! I would love to indulge with a milk mustache and take my profits to the bank and wait for the next recession to hit but is it a smart move?

What strategies work for you?

[David Faulkner]

If the property is performing as expected, the tenants are good and consistently paying rent, and you are not over leveraged, then it is basically doing what you bought it to do and I wouldn't sell. If it ain't broke, then don't try to fix it. Plus, it will cost you 10% transaction fees, plus around 15% federal capital gains, plus state income tax, plus Obomacare tax to sell. If on the other hand you are leveraged to the hilt without much margin for error and/or you have some dogs in your portfolio that aren't really preforming up to expectations, then now is a really good time to dump them for profit. In the meantime you can bank your cashflow and save like crazy to refill your war chest for the next recession if you like.