10 ways to know if you should sell your condo in Thailand
Real estate investment is all about maximizing your profit. As a landlord, you’ve most likely enjoyed the passive income. However, for most owners, there eventually comes the point when holding on to property no longer makes personal or financial sense. You want your investment property to be an asset instead of a burden on your finances, so keeping your rental property forever isn’t always realistic. Maybe you’re moving away from Thailand and don’t want to worry about managing the property from afar. Maybe you’re having trouble keeping the home leased to tenants, you’re trying to pay off debt, or you’re just ready for a change. Whatever the reason, choosing the perfect time to sell a condo in Thailand can feel like a gamble.
So to help you make an informed decision, here are 10 signs it’s maybe time for you to sell your rental property.
1. Your rental property isn’t performing well
Sometimes rental property just won’t perform as well as you expected it to be. Several months of negative cash flow isn’t always a good reason to sell. However, it’s still a good idea to reevaluate and find the problem. Sometimes, the problem is beyond your control. For example, the market rents may have dropped. In this case, the best scenario is usually to sell the condo. If you keep losing money each month, your condo is depreciating in value, and the market is looking stable, it’s definitely time to sell your condo.
2. You’ve found a better investment opportunity
The reason we’re investing in property is to increase capital gains. So if you’ve identified another opportunity to yield more attractive returns over time, it makes sense to seize it. For example, you’re now making 10% a year on your money, but you have the potential to make 20% or even more. This is one scenario where selling your current property is better. Just make sure to do your research first. Remember, both buying and selling a property involves a lot of costs. You may not get the full value of the property since you may need to make some repairs to the property before selling it, or you may need to pay closing costs. Thus, only sell your condo if you are sure you can make a better cash return even after considering those expenses.
3. You hate being a landlord
A lot of people think being a landlord is easy, but not everyone is cut out for the job. Being a landlord means being a business owner, so you may have to do some difficult things to ensure you get positive cash flow. It’s clearly not a 9 to 5 job, so you’ll have to be ready to answer a tenant’s call any time of day and resolve the issue they’re complaining about as soon as you can, especially if there’s a significant issue. Plus, not all tenants are the same. Some can cause problems consistently and give you a headache every minute of every day. The job can be harder on soft-hearted people. Imagine having to evict a tenant who’s behind on rent – it takes a strong heart to do that.
If it’s starting to feel like being a landlord is more trouble than it’s worth and the stress isn’t equal to the revenue, it’s maybe time to part ways with your rental property. Of course, you can always hire a property manager to help, but be sure the cost isn’t breaking your budget.
4. Your life situation is changing
Nothing is certain in life. All too often, your life situation may change drastically and get in the way of dealing with a rental property. Whether you’re having another child, quitting your job, experiencing a death in the family, retiring, or moving to another country – these drastic changes in your life can make your rental property feel like a burden. It’s probably better to cash out than try to manage the property while dealing with these complicated issues in your life.
5. Your property is now worth more than when you bought it
If your condo has appreciated quickly in value, selling it can be a better option than renting it out. There are many ways a property can appreciate in value. For instance, you might have successfully flipped it, and now it’s worth more than you paid for it. Sometimes you may get lucky, and the area of your property has grown and prospered. A booming market may mean your property value has increased. If the value of your property has increased rapidly, you may be able to sell it for a profit, covering your closing expenses and allowing you to break even. However, you should still speak with a realtor to see whether you will be subject to capital gains taxes in order to make the best decision possible.
6. The market has little to no potential for future growth
If the property market in the area where you’ve invested has been stagnant for a long time, you may wish to sell before it starts to fall further. One way you can know is if the area is seeing higher vacancy rates or if the population in the area is static. Market crashes can linger for years, so if you think the market is about to crash, you might want to get out now.
7. You can no longer afford the maintenance cost
Investing in property in Thailand is easier said than done. We all want the money to flow into our pockets, but sometimes we end up not receiving anything at all. Let’s face it, some properties just end up being a dud. Maybe the roof is constantly leaking, the floor is way too outdated, or the HVAC system is on its last legs. Yes, investing in property means dealing with these problems. However, sometimes, these constant maintenance issues can cause a hit on your bank account. If you find it challenging to fund costly repairs, selling your condo can be the answer.
8. You’re moving away from Thailand
Moving away from Thailand can be a reason to sell. Being a landlord is difficult enough; you’ve got to find tenants, do paperwork, ensure regulations are met, deal with troublesome tenants, and more. Keeping up with landlord responsibilities takes a lot of time and effort, no matter where you do it. However, striving to live the landlord lifestyle from afar adds still another layer of difficulty to an already difficult scenario.
9. Your net worth is invested in a single portfolio
Asset diversification is key. Many real estate investors begin with a single property and gradually expand their portfolios. When you simply own one piece of property, you are quite vulnerable. Thus, if your net worth is all tied up in one place, it may be a good idea to diversify your assets. After all, you don’t want to put your financial health and future stability at risk by not having a backup plan in place if the property market crashes. Therefore, if you are too tied up in real estate, it may be a good idea to consider selling your condo and expanding your investment portfolio to include other assets.
10. You’re in debt
The last reason why selling your condo in Thailand might be a good idea is if you’re currently in debt. Selling a rental property may be your greatest option if you’re going through a divorce, bankruptcy, or just need to pay off a large amount of credit card debt. However, speaking with a financial specialist before making any decisions about your rental is essential. Keep in mind that selling your rental property entails giving up investment as well as a source of income.
Sometimes, selling your condo in Thailand is a smart decision. When you’re ready to wave goodbye, Thaiger Property can help. From helping you make an informed decision to marketing your property to the best audience, an experienced property specialist can help you save time and money.
If you are sure about selling your condo, check out our article on the 10 tips to sell your property quickly in Thailand.
