Real Estate Exit Strategies

Most investors recognize there is no ideal holding period for an investment. It's easy to do nothing and simply hold the real estate. Although, it's important to be sensitive to external factors over time that may impact an investment's future cash flow and current value. These external risk factors include, local supply and demand, trends in the national, regional and local economies, interest rates and capital availability. Besides external factors, after- tax cash flows can be impacted by terms of the loan and consequences of income tax. Investors should continuously monitor an investment's financial performance and risk factors that could have impact on cash flow and value and use this as exit trigger points. Holding too long or trying to sell on a downward real estate cycle is not a good investment strategy. So what about a tech bubble mentality in real estate ? Is it already happening in certain markets ?

Tony Casalena, CCIM