When is it a good time to sell?
If you want to get the money out of your apartment building and into another investment, then it might be the right time to sell. Of course, if you have enough equity, you could probably accomplish the same thing by taking a line of credit and using that as cash for another investment. Using a line of credit to use the equity to invest in another property.
If you’re ready to not be a landlord, then it might be the right time to sell. Again, if your building is making money, you have built up a reserve for capital expenses, and you’ve got a good property manager, owning your multi-family probably isn’t that much work. Why not just keep it?
If it’s not making money, and you don’t want to put the time and effort into turning it around, then it might be the right time to sell. However...not all investors will want to buy a building that’s not making money So, you might not get that great of a price. Forcing financial appreciation.
There are some investors who look at their portfolio every year or so, and cull the herd. What’s the lowest performing building? Divest that one. Or, if there’s not a way to get the total return above XX, then get rid of any of those holdings.
In general, we’re fans of buy and hold. If you have a sound maintenance and update cycle, good reserves, and your building has steady cash flow, why not just keep it forever?
That said, if there was a big run up in values for multi-family properties, and you wanted to take profits, (achem...taxes?) then that might the right time to sell.
And you thought you’d get a simple, straightforward answer.