Smart Biz

Selling home The Part of Tens

If you own property that you hold solely for rental/investment purposes, you probably have a great deal of discretion about when you sell the property. As with other investments, you may wonder when a good time to sell is.

Surely you have some sense from watching real estate prices and rental vacancy rates whether your local market is strong, weak, or somewhere in between. Although we don't believe that we - or you - can predict future real estate prices in a given community, to help you better determine whether now is a good time to be cashing in your chips, examine the following factors:

• Economic health: The vitality of the local employment market is crucial to a healthy local real estate market. What's the unemployment rate in yourlocal area and how does that rate compare with prior months and years?
• New construction: If real estate prices have been on the rise, the number of new building projects may be on the increase, which can be a sign that now is a good time to sell. As more properties come onto the market and prices spiral higher and higher, eventually the increase in construction acts like water on a fire, extinguishing future strength.
• Available land: Housing units must be built on land; the less land that remains available for development, the more upward pressure is exerted on housing prices.
• Housing for sale: All things being equal, the fewer properties for sale, the better the environment in which to be selling. In a strong real estate market, housing sells relatively quickly and the inventory of property for sale is in relatively short supply.
• Rental real estate market health: Although being a renter is tough when vacancy rates are low and falling and rental rates are escalating, being the owner of rental/investment real estate is great. Rental real estate is worth more when the local rental market is strong.

You need to spend some time and energy tracking down useful information. Try these suggestions:

• Your local Association of Realtors should be able to provide you withs ome historic house sales data.
• The local Chamber of Commerce can steer you in the direction of job market data.
• The U.S. Bureau of Labor Statistics also compiles employment data.
• Apartment and other rental property owners also have local associations that can provide you with rental data on the local market.