If you have reached the point where the idea divesting ownership in your present property is looking more attractive, you should consider the alternatives to continuing to hold the property.
If you decide to sell outright, pay the taxes and reinvest, you will have the following to consider:
- How much net cash will you have to reinvest?
- What can you purchase, or reinvest in, with that amount?
- How much after tax cash flow will you receive?
- How much will your principal amount increase to in any given period of time?
If you decide to refinance and invest that money in something else you will have to consider:
- How much net cash can be realized that can be invested
- What can be purchased with that amount of money?
- How will your present property perform for you after the refinance over a given period of time?
- How will the new investment perform over the same given amount of time?
- How will the combination of the old property (after refinance) and the new investment perform over the same period of time?
- If the answer is that this refinancing strategy will give you more, in that same given period of time, then this would be a more desirable step to take.
If you should decide to exchange and acquire a larger property you would have to consider:
- After the exchange, and in the same given amount of time referred to in the above examples, will you have more cash flow and net equity?
- If the answer is "yes" then the exchange would be the more desirable rout to take.
In selecting a strategy of selling, refinancing or exchanging there are other things to consider:
- The questions of weather or not the new investment property will perform well enough for you to reach the goals and expectations you have when you make the decision. In other words are you buying at the right time and paying the right price?
- What kind of "surprises" will you encounter in operating the newly acquired property? Ate there deferred maintenance, management or tenant problems you are unprepared to handle?
Here is where the skills and experience of Litton/Fuller Group will pay you enormous dividends. Our staff can provide you with the tools with which to accurately measure the returns of each of the alternative strategies to that of continuing to hold. We can also help you determine how deferred maintenance, tenant and management problems can be forecasted with remarkable accuracy.
Having a Litton/Fuller Group representative at your side while pondering these questions and strategies can give you a big edge in realizing the goals you have set for your financial future.
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