Real estate is often considered one of the most reliable and safest forms of investing one can make. Owning property usually means a profitable investment for the owner, but there are plenty of examples of investments not turning out the way one had hoped. In real estate, one of the most common examples is when a divorce comes into play. A couple buys a house that they plan on living in for decades but within years they get divorced.
The property now either needs to be controlled by one person, remain in both their ownership or it needs to be sold. If the market is doing well and the property has increased in value, this may not be as difficult a decision, especially if a sizable profit can be made. However, what happens when a profit is not on the table and the property is too expensive to hang onto? This is when legal matters are influenced by financial limitations.
The Current Market
The reality is that the current real estate market is not that strong. Values are staying up which is good, but it now takes months to sell a property. This is due to high interest rates which has taken a large portion of interested buyers out of the market. Now, will your house in Arizona still sell and for reasonable value? That can only be answered by an experienced local realtor.
You may have to take this into consideration when you are reviewing the assets you want to take control of. If the property is too expensive for you to manage on your own, taking it may not be ideal. If there are more cost-effective but valued options that you can take instead, that may be more beneficial to you. If you are not sure if owning the property is a smart idea, there are some things to consider as you review the home.
Quality Of The Property
What condition is the property currently in? Does it need to be demolished? Does it need 50k in work or is it in great condition? If it’s in great condition it may be worth keeping right now as it would be far easier to rent out to help cover costs and wait for the market to potentially turn. If it needs work you have to consider that will not only make it more difficult to sell, but to maintain as well as the longer you own the property the more those issues need to be addressed by you.
In this type of market, investing 50k into your property as far as renovations and upgrades go does not mean you will see a return of any kind on the sale. That investment may only go to help you sell the property quicker which is why you have to consider your personal finances along with the quality of the property.
Value Of The Property
What is the property worth and what is still owed on it? Those are two very important questions you need answered before you make a decision. As you research the value of your property, look at homes in your area and what they have recently sold for. This gives you a ballpark idea of what you could possibly get for your property. However, it also shows what buyers are looking for regarding that price tag in your location and you need to make sure your home can meet that expectation. While the market has cooled down, values have remained strong.
Arizona is showing a strong real estate market, but it has certainly cooled from the last several years. While values are staying strong, homeowners are still having to wait a bit longer for reasonable offers. If you want to sell you have to consider how long you can afford to let the house sit on the market as it may take months to sell.
Can You Keep It?
Let’s say the property is in good condition and in a nice neighborhood with a mortgage that is affordable because it’s at a low interest rate. Should you keep it? That cannot be answered online. However, something to think about is whether or not you want to keep it? Put aside investment options and ideas for a moment. What makes you happy?
Do you like the house? Do you still see it as home and a place you want to live for years? Then if you can afford to keep it, try and keep it. This decision, either way, needs to be based on what your options are. Can you afford to keep it? You know the answer to that and that answer along with whether you want to live there or not need to be top of mind.
What Do You Want To Do?
The real estate market is not ideal right now. However, if you are looking to cashout on a property and start over in a new area of town or even a new state, why not go for it? Talk to your attorney and your realtor about your options and what makes the most sense for you. Remember, as you review the o