When to Sell a Rental Property

Landlords are taught to buy and hold. Property is a long game, they say. Ride out the dips, wait for appreciation, let time do the work.

But sometimes holding is the wrong move. Sometimes a property quietly stops earning its place in your portfolio, and the best thing you can do is sell. Knowing when to exit is just as important as knowing when to buy.

Signal 1: Your Net Yield Has Collapsed

Gross rent is easy to track. Net yield is harder. If you're still measuring returns by what tenants pay rather than what you keep, you might be missing the story.

A property can look healthy on paper while silently draining profit. Rising maintenance costs, higher insurance, new compliance requirements, mortgage rate increases — all of these chip away at yield without touching headline rent.

If your true annual return (after all costs, voids, and taxes) drops below 2–3%, you should ask a hard question: is this asset earning its place? That capital could be deployed elsewhere — in a higher-yield property, an index fund, or even paying down debt.

Signal 2: Maintenance Costs Keep Climbing

Old properties have a rhythm. For the first decade or two, maintenance is modest. Then systems start failing: boilers, roofs, plumbing, electrics. Each year brings a new surprise.

If you're spending more than 10–15% of gross rent on repairs and upkeep, the property may be entering its expensive phase. That doesn't mean sell immediately — but it does mean modelling future costs, not past ones.

A roof replacement or full rewire can wipe out several years of profit. If you see big-ticket items coming, it's worth asking whether the next owner should bear those costs, not you.

Signal 3: You're Managing Risk, Not Return

Some landlords hold onto properties not because they're profitable, but because they're afraid of what comes next. They worry about capital gains tax, about losing a "passive" income stream, about the hassle of selling.

But fear is not a strategy. If the property is underperforming, you're not protecting wealth — you're eroding it slowly. The opportunity cost of a tied-up asset is real, even if it doesn't show up on a statement.

Ask yourself: if I had the equity in cash today, would I buy this exact property at this exact price? If the answer is no, you already know what to do.

Signal 4: The Local Market Has Shifted

Property values are hyper-local. A strong national market means little if your area is softening. Population decline, job losses, oversupply of new builds, changes in transport links — any of these can tip a micro-market.

Watch the signs: longer void periods, more listings sitting unsold, downward pressure on rents. If comparable properties are struggling to let or sell, it may be time to exit before the trend deepens.

Selling into a weakening market is painful. But holding until the bottom is worse.

Signal 5: The Property No Longer Fits Your Life

This one isn't financial, but it matters. A rental property should serve your goals, not the other way around.

If managing a property is causing stress, draining time, or preventing you from pursuing other opportunities, the cost isn't just financial — it's personal. Landlords who inherit properties or buy impulsively often end up owning assets that don't match their life stage.

There's no shame in selling because a property no longer fits. In fact, it's one of the smartest reasons to exit.

How to Decide

Start with the numbers. Calculate your true net yield, not the number you hope is right. Then project forward: what will this property cost and earn over the next five years?

Compare that to alternatives. Could your equity earn more elsewhere? Would selling let you consolidate into fewer, better properties? Would it reduce stress or free up time?

If the answer to any of these is yes, the case for selling strengthens.

Holding is not always patience. Sometimes it's inertia. The best landlords know when to let go — and they do it before the market makes the decision for them.