Why do landlords sell their rental?

[StormRichards]

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.

This is far from the truth unless you are buying rental properties in different locations. We know several people that own investment properties, and they always have go to guys with backups. One of our friends almost deals solely with ONE contractor for 11 properties.

[rennigade]

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.

Trolllolololol

I know a person who owns almost 30 rentals. They had 2 people to service all 30 units.

Hell I live in an apartment complex at the moment. There around 150 units and they have 3 maintenance on staff...thats it. And they wonder why they can never keep anyone for more than a couple months.

[sv2007]

This is far from the truth unless you are buying rental properties in different locations. We know several people that own investment properties, and they always have go to guys with backups. One of our friends almost deals solely with ONE contractor for 11 properties.

I speak from 1st hand experience -- while you reference 2nd hand info.

[StormRichards]

I speak from 1st hand experience -- while you reference 2nd hand info.

I don't need to own investment property to have knowledge about it. The statements you make are so out there that it is impossible to ever take you seriously. I was glad to see that I am not the only one that feels this way.

If YOU need/needed a different contractor for each rental property you own/owned then you probably should hire/have hired a property manager.

[TexasHusker]

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/

You have to work pretty hard to lose money at landlording. It has its pitfalls for sure, bit losing money generally isn't one of them unless you're a complete idiot.

[TexasHusker]

We own and/or manage 30 vacation rentals and deal with about 4-5 different tradespeople, depending on the need.

[StormRichards]

We own and/or manage 30 vacation rentals and deal with about 4-5 different tradespeople, depending on the need.

Why not 30?

[james.hendrickson]

To answer the OP's original question, there are several reasons why someone might want to sell their investment real estate. Here are eight.

1. To get a better return elsewhere or roll the property into a larger opportunity via a 1031 starker exchange. William Nickerson's "How I turned 1,000 in a 5,000,000 in Real Estate In My Spare Time" is a really excellent example of this.

2. Divorce. A family disruption such as a divorce will cause the priorities of the owner to change.

3. Death. Often heirs will sell investment property acquired by the deceased. This is especially the case if the property is medium sized and requires active management by the heirs or is marginally profitable.

4. When the profitability of the property is reduced. This could include:
- When the real estate market is declining in your area with little hope of recovery (e.g Detroit)
- When your depreciation benefit runs out
- When local or Federal agencies change tax laws
- When operating costs increase (such as elevated insurance, bank interest, utilities or tenant acquisition expenses)

5. When you don't need the income. For example, some people sell their investment properties when they are able to start taking social security or are able to draw from their 401ks.

6. To take profits. Some people make a living from rehabilitating and reselling investment properties. They need to sell to cover housing costs or other living expenses and selling investment properties is how they have income.

7. Change in business/investing strategy. For example, investors looking to stabilize their income may sell off half of their leveraged assets in order to pay off the remaining debt on the rest of their rental properties. Similarly, an investor might decide to change their strategy from buy and hold to investing.

8. Stress reduction. Some naïve investors don't have a good sense of what it takes to self manage real estate. They find out the hard way that it’s not so easy dealing with tenants and managing a property. For them, selling may be the only way out of a bad situation.