Why do landlords sell their rental?

[sethmachine]

When landlords or other property owners decide to sell their rental, what are the common motivations?

I see many ads on real estate listing sites that entice buyers by claiming things like these:

"All Units already rented and tenants will cover mortgage"

"Great starter investment"

"Great for owner occupied home with tenants paying mortgage with their rent"

Some reason I think someone would sell their rental:

1. They are tired of managing it (old, retirement, etc.)

2. They are moving out of the area

3. They have been losing money on the rental or suspect it won't be profitable soon

4. ???

[StormRichards]

Perhaps they are trading up to something bigger

[97guns]

4) they have realized huge gains and are taking money off the table

[disneysteve]

4) they have realized huge gains and are taking money off the table

You might as well ask why does any investor sell any investment? Why does someone sell shares of stock or a mutual fund? Why does someone cash out a bond? It could be that they need the money for something else? Maybe their kid is starting college and the equity in the property is their "college fund". Maybe they've made their money and want to realize that profit, as 97guns suggested. Maybe they feel future growth of that particular property is limited and they have another opportunity that they think will do better going forward.

[TexasHusker]

I sold some rentals to finance rentals with a better yield elsewhere.

Many investments, though not all, are essentially a disagreement between the buyer and the seller.

[StormRichards]

You might as well ask why does any investor sell any investment? Why does someone sell shares of stock or a mutual fund? Why does someone cash out a bond? It could be that they need the money for something else? Maybe their kid is starting college and the equity in the property is their "college fund". Maybe they've made their money and want to realize that profit, as 97guns suggested. Maybe they feel future growth of that particular property is limited and they have another opportunity that they think will do better going forward.

THIS

The fact that seth bolded part of his post, it appears he is making an assumption that the property is not a good deal.

[sv2007]

1. They are tired of managing it (old, retirement, etc.)

That was our reason. During retirement, we decided that rentals are a headache that we don't want.

[nadine_doa]

I'm selling our rental when the work is finished. I have a landscaper over there now and the replacement window contractor said he will come tomorrow. (He's lied to me before, however, so we'll see.)

We're selling it because I judged it not worth my while to rent it out again. We'd get maybe $36,000 gross rent ($24,000 after taxes and insurance) but the property is 30 minutes away.

I'll be so happy when this is sold!

[LivingAlmostLarge]

I'm selling our rental when the work is finished. I have a landscaper over there now and the replacement window contractor said he will come tomorrow. (He's lied to me before, however, so we'll see.)

We're selling it because I judged it not worth my while to rent it out again. We'd get maybe $36,000 gross rent ($24,000 after taxes and insurance) but the property is 30 minutes away.

I'll be so happy when this is sold!

Why isn't it worth it? It is pulling in $36k but what are the expenses? only $24k?

[nadine_doa]

Why isn't it worth it? It is pulling in $36k but what are the expenses? only $24k?

Because my time is worth more than that. i.e. I have a business of my own I'd be taken away from if I rented the house out and had to manage it.

Life is too short to spend it earning such a paltry return.

[Fishindude77]

Could be many reasons.

• Tired of work associated with being a landlord.
• Foresee large upcoming expenses on the property and figure they'll let the next owner worry about it.
• Depreciation has run it's course.
• Opportunity to make a windfall profit.
• Need the money for other things.
• Local tax structure changes affecting profitability.
• Bad experience with tenants.

[nadine_doa]

Update

I'm selling our rental when the work is finished. I have a landscaper over there now and the replacement window contractor said he will come tomorrow. (He's lied to me before, however, so we'll see.)

We're selling it because I judged it not worth my while to rent it out again. We'd get maybe $36,000 gross rent ($24,000 after taxes and insurance) but the property is 30 minutes away.

I'll be so happy when this is sold!

Hard to believe I posted this six weeks ago. Wow!

The landscaping is done but the replacement window contractor still hasn't finished his work. Apparently he doesn't need the money?

THIS is one of the reasons landlords sell their rentals. Getting contractors to do what they contracted to do can be an incredible hassle.

There's also a big difference between owning one rental and owning, say, a dozen. If you've got rents coming in from 11 houses while one is under repair, you're in a better situation than the hapless owner (me) who can't seem to get the work on the one rental house completed.

[StormRichards]

Hard to believe I posted this six weeks ago. Wow!

The landscaping is done but the replacement window contractor still hasn't finished his work. Apparently he doesn't need the money?

THIS is one of the reasons landlords sell their rentals. Getting contractors to do what they contracted to do can be an incredible hassle.

There's also a big difference between owning one rental and owning, say, a dozen. If you've got rents coming in from 11 houses while one is under repair, you're in a better situation than the hapless owner (me) who can't seem to get the work on the one rental house completed.

I think it is important to either be a skilled DIY'er or have reliable connections for the scenario that you describe above. A rental without a property is lost income. My DH and I have always had an interest in real estate, but we are not handy and don't have those connections.

[LivingAlmostLarge]

Hard to believe I posted this six weeks ago. Wow!

The landscaping is done but the replacement window contractor still hasn't finished his work. Apparently he doesn't need the money?

THIS is one of the reasons landlords sell their rentals. Getting contractors to do what they contracted to do can be an incredible hassle.

There's also a big difference between owning one rental and owning, say, a dozen. If you've got rents coming in from 11 houses while one is under repair, you're in a better situation than the hapless owner (me) who can't seem to get the work on the one rental house completed.

thanks for explaining how the situation works. I always hear how easy it is to be a landlord. No one ever talks about losing money on landlording/

[sv2007]

There's also a big difference between owning one rental and owning, say, a dozen. If you've got rents coming in from 11 houses while one is under repair, you're in a better situation than the hapless owner (me) who can't seem to get the work on the one rental house completed.

Owning a dozen means you just have a dozen contractors that you must deal with.

The grass is always greener on the other side of the fence.