I often get inquiries from potential sellers who ask: Should I sell my duplex, triplex, or fourplex in Sacramento right now? When does it make sense to sell a small multifamily property in today’s Sacramento market? Is now a good time to sell a rental property? Does it still make sense for me to own this rental property?

Every year I have these conversations with property owners thinking about going out of the rental business. That naturally leads to questions about opportunity cost. What am I currently not doing that I could be doing if the equity in this property were liquid, or if I weren't tied down? I hear these questions most often from owners of single-family rental homes, and owners of small multifamily properties like duplexes, triplexes, and fourplexes. They’re mostly what we refer to commonly as "mom and pop investors" -- meaning regular people who bought with a long-term plan in mind: retirement income, cash flow, or long-term wealth building. And let's face it, for a long time, that plan has worked well. But heading into the new year, perhaps the calculus has shifted.

In the Sacramento market, single-family rentals and 2–4 unit properties continue to attract strong buyer interest. Buyers include owner-occupants planning to live in one unit and rent the others, as well as long-term investors looking for stable, well-located assets. Properties with solid fundamentals remain in demand. Reach out and I am happy to talk it through with you, analyze your income and expenses, the rental market and scenario, and to give you a sense of what your property might be worth.

If you have talked to your CPA and some of the tax advantages of owning rental investment property have run their course, it might make sense to sell. Depreciation is usually part of this conversation. Many long-term rental owners are nearing full depreciation, meaning the tax advantages that once made ownership especially appealing are starting to fade. When those benefits diminish, it often prompts a closer look at whether continuing to hold still makes sense.

If you are are considering retiring and riding off into the sunset in their RV and owning rental property in Sacramento is not something you want the responsibility for, it might make sense to sell. Some landlords begin to wonder whether keeping that equity locked inside a rental property is still the best use of their capital. For landlords approaching retirement there is often a shifting desire for liquidity and simplicity. Selling a rental property can provide funds to support retirement, reduce risk, and eliminate the day-to-day responsibilities that come with being a landlord.

If you already live outside of the area and coordinating repairs and keeping up with tenant issues from a distance is too much to manage, it might make sense to sell. Absentee owners, in particular, may decide it’s time to cash in, simplify their lives, and redeploy the proceeds toward other investments, lifestyle goals, or greater financial flexibility.

If your tenant has stopped paying rent and you are faced with an expensive eviction, and just do not want to deal anymore, it might make snse to sell. Or perhaps a tenant has provided notice to vacate, and it proves to be an opportune time to sell rather than re-rent the property.

If you want to help your adult kids buy their first home, selling the old rental property may be the perfect vehicle for a tax deferred 1031 Exchange, and it might make sense to sell. A lot of my clients are considering how to help their adult kids become homeowners and maybe give them the inheritance a little early.

If expenses like insurance premiums are increasing, or there are some anticipated large repair expenses looming due to some deferred maintenance, it might make sense to sell. A new roof, a new HVAC, a new sewer line, dryrot or termites...these can be big ticket items if a housing provider does not have liquid reserves set aside.

If you aren't excited with the direction the California legislature is going with tenant protections and the ever-evolving regulatory landscape, it might make sense to sell. In the last few years, California has enacted AB1482 rent caps and just cause eviction, has limited the amount a landlord can charge as a rental deposit, and has now required landlords to provide refrigerators and stoves as a condition of habitability.

If you never intended to be a landlord in the first place, it might make sense to sell! You inherited the property, or maybe couldn't get the price you wanted when you moved out of the property and decided to rent it out.



Erin Stumpf, Coldwell Banker Realty, California DRE# 01706589 - erin@erinstumpf.com or call/text 916-342-1372