It’s rarely a simple decision to sell an investment property. Making this decision is as much about your personal circumstances as it is the current real estate market.

Currently, vacancy rates for rental properties are at an all-time low, while home prices continue to stay high post-pandemic. The demand for rentals has increased, but so has the demand for homes for sale.

While it’s impossible to say how things will look in the future, both the rental market and the housing market continue to stay strong. So should you sell or rent your investment property come spring 2023? Let’s take a closer look at your options.

Consider Selling If You Can’t Wait

Selling a property is a personal decision, even if it is an investment property. As inflation wanes, if you need to sell, spring 2023 may be the time to do so.

As home prices drop with inflation, demand will as well. So your rental property may not be as profitable as the market changes, and if you choose to sell later in the year, you may not get the best price.

However, if you sell, keep in mind that you will lose your low mortgage rate if you are fortunate enough to have one. So if you plan on purchasing a new property—whether as an investment or for personal use—you will likely have a much higher interest rate if you sell in 2023.

If your investment property has a low profit margin and has been more stressful than you anticipated, selling may be worth considering. Another common reason investors sell is if their goals or life circumstances have changed, prompting them to move in a different direction.

Selling is also worth considering this spring if your property is in need of major repairs, such as a roof replacement, HVAC system, or kitchen remodel. If you’re thinking about selling anyway, it may be better than making repairs, as you may not see a return on your investment with these upgrades.

Hang on to Your Investment for Better Profits

Generally, the longer you own your income property, the better. If you can hold on to your rental property through spring 2023, consider doing so.

Renting out your property during periods of high inflation can net higher rents. Since inflation typically doesn’t stay high for long, take advantage of this time while you can. For example, you can save more of your profits and use them to cover expenses when the market shifts and there is a higher chance of vacancies.

If your investment property is a single-family home (SFH), rent growth is anticipated to stay strong, especially since people continue to work from home after the pandemic. So if you have a SFH, consider holding on to your investment.

Continuing to rent your property may also be the right choice if you just purchased your investment or you can’t afford another purchase at current interest rates.

Wondering Whether to Rent or Sell?

Each individual’s situation is different, and the right time to sell for one property owner won’t always be the same for another.

Are you considering selling your investment property in spring 2023? If you’d like to hang on to your rental but want to increase your profit margin and reduce stress, chat with our professional property managers at FAS Management.

We help investment property owners in Washington, DC and Maryland make the best choices for their investments. Call us at (202) 337-5080 today.