Grant Cardone: How To Know When It’s Time To Sell an Investment Property
Written by
Gabrielle Olya
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Amber Barkley
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Real estate can make for a great long-term investment, specifically if it provides you with rental income. But there may come a time when it makes financial sense to sell an investment property and either pocket the profits or reinvest in a new property.
GOBankingRates spoke with Grant Cardone, private equity fund manager and real estate investor, about how to know when it’s time to sell an investment property — here’s what he said.
There’s a ‘Magical Formula’ To Know When It’s Time To Sell
Knowing the right time to sell an investment property comes down to math.
“You exit when you’ve hit your target,” said Cardone, who will be hosting his 10X Business Summit in Scottsdale, Arizona, Jan. 12-14, 2024.
Any time you buy an investment property, you should set a target for how much you want to make and figure out how long it will take to get there.
“Let’s say I had a target to make $1 million. I just need to know how many times I need to raise the rent $25 to hit my $1 million exit target,” Cardone said. “There’s a magical formula for knowing when to exit the property.”
$1 Million Should Be Every Real Estate Investor’s Target
While $1 million might seem like a lofty goal, Cardone believes it’s doable for savvy real estate investors.
“Every property should produce $1 million of profit for the person that owns it, or they shouldn’t have bought the property,” he said.
To find a million-dollar property, the main thing you need to focus on is its size.
“It’s really an issue of the scale of the property, meaning, how many units and how much can I raise the rent?” Cardone said. “For instance, I know that if I take 32 units that are rented at $1,000 right now, and if I can get those rents to $1,200, I know that I’m going to make $1.2 million unquestionably in any market — any city, anywhere in the world, any economy, it doesn’t matter.”
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