Real estate investments do not always go the way you plan them to go. It is a good idea to have several exit strategies prepared so you can leave the investment with minimal damage. Here are a few exit strategies you should think about:
- Selling—If the property is a rental property, selling it outright is an obvious exit plan. If you’ve tried to sell and haven’t been able to at the price you want, calculate the amount you need to break even. Make sure you include everything. Reduce the selling price to the amount you need to break even. This way you might not make money, but you won’t lose money either.
- Networking—By networking you can often find a potential buyer. This includes real estate investors. You can find your local REIA, which stands for Real Estate Investment Association, on the national website. You may find another investor to complete the work you started and sell the property. You may also find a partner through networking. A partner can help you through the rough patch you’re in for part of the profits.
- Relocate/rent—Sometimes an investor may know they can sell the home they’re currently living in, but are having difficulty selling the investment property. If that is the case, you can rent the space you’re currently trying to sell and sell where you’re living now. This can be inconvenient if a family is involved, but if necessary, you can make it work if you put your mind to it.
- Corporate housing—Often you can contact a corporate housing company to find a renter for the property. Corporations also quite often buy properties to house executives or clients because in the long run they pay less for the property than the costs of motels.
- Short-term/Vacation renting—This can be risky, but if you’re in a great vacation location, such as near the beach or a ski resort, you may be able to rent your property as a vacation property by listing the property as a vacation rental. It may be seasonal income, but if you’re lucky, this type of thing can often help you get over the difficult time until you are able to find a buyer.
- Talk to the lender—If you can talk to the lender before you begin missing payments, they may be able to help you find a solution such as a lower interest rate for a longer period of time or a mortgage deferral to prevent foreclosure. Talking to them ahead of time will give them greater options to help you than if you wait until the properties are forced into foreclosure.