Q&A: When Should I Sell a Rental Property? – Episode 1027

If you own a rental property that needs constant repairs and maintenance, what should you do? Is it better to sell a high maintenance property, or is there a better way to deal with it? That’s the first question I’m answering on this Q&A episode of Investing in Real Estate.

Today I’m answering three of your great questions on dealing with repetitive repairs, turning your first home into a rental property, and the rules on using a property in your self-directed IRA. Click play to hear my answers to your questions!

On this episode you’ll learn:

• What to do with a property that needs excessive repairs.
• How to turn your primary home into a rental property.
• The rules on using property inside your self-directed IRA.

What to Do with a Property That Needs Excessive Repairs

In general, I think it’s always smart to be paying attention to your portfolio and keeping an eye out for any properties that are causing you problems. However, if it’s a problem with repairs, I think this can easily be fixed. It’s a matter of outsourcing. Work with a property management team and a contractor to get the job done. Let’s reframe this. Pretend you own 100s of properties. Would you be struggling with this one repair? Absolutely not. You’d delegate and get it taken care of.

How to Turn Your Primary Home Into a Rental Property

In this case, since you’ve got a low interest rate and a great mortgage product, I think you can make this work! I would hand the keys over to a property management team and make sure you’re getting a great tenant. From there, you can tap into that equity and build out your portfolio. The only thing you’ll need to consider in this situation is if you want to invest in California. It’s more expensive and it’s not a landlord friendly state. Not necessarily a deal breaker for this one property, but personally I’d be looking to expand into different states.

The Rules on Using Property Inside Your Self-Directed IRA

Unfortunately you cannot live inside a property owned by your self-directed IRA. This would be self-dealing and is against the IRS rules. You may be able to transfer ownership after retirement, but you’d need to consult your custodian and attorney.

Ask Me a Question at morrisinvest.com/clayton

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