When Should I Sell Investment Property?

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u/Monopoly · Joined Oct 2024

Thinking about selling your investment property to reinvest elsewhere? Timing is key. Explore the factors to help you decide if now is the right time to sell.

Last update Nov 2024
  • Scenario 1: Keep renting out
  • Scenario 2: Sell, and invest the proceeds
  • Which One Is Higher (%)

Focus on the highest point of the yellow curve—this indicates the optimal time to sell for maximum profit. If the curve is on a downward trend, it might be time to consider selling soon to avoid losing value on your investment.

# Years from Now

Try your numbers:

Enter its current market value, annual appreciation, and original purchase price.

A =

B =

Enter the monthly rent you're charging the tenant. Assume the tenant stays with you; or, factor that in (for example, when your tenant leaves, your property might be vacant for several weeks)

C̃ =

Enter the property taxes you're paying for this property. Municipal tax, school tax, water bills, etc.

D̃ =

Enter the monthly maintenance cost, and forecast how much it'll increase in the future. E.g. condo fees, maintenance contracts, etc.

Ẽ =

On top of your current income, for every dollar earned, how much you're obliged to pay to the CRA (and Revenu Quebec, if applicable). Use a tax calculator to find out.

F =
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Time Value Assumptions

Heads Up!

If you're using Cost Basis (cb) for calculating capital gains:

Please be aware that very few countries currently use inflation-indexed cost basis. Double-check your local tax rules before publishing.

Scroll up to view updated chart.

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How is Cash Value calculated?

Suppose you keep renting, and sell the property at the year of evaluation. Assume a standard 6% closing costs (staging, vacancy, agent commissions, lawyer fees, etc) when you sell the property.

Calculations

(Expressions are evaluated at every year.)

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