Gentrification, when is it time to sell?

Question

Hi, So we bought our home and lot about 7 years ago.   We thought it would take much longer for it to flip and gentrify; but in 6 years both the lot and home have increased in value by roughly 400-500%.   My questions is...when do you know, or best guess, when to cash out?   Any advice?  We are in South Texas.

Bob Okenwa · Answer

I don't know the inner workings of your market, but from my own perspective, I'd cash out if it made sense financially for me to move on and continue on with my real estate endeavors. One in the hand is worth two in the bush and it's better to get out a year or two early then to try and get out a year or two late. I've seen homes in my area purchased in 2006 and 2007 that are still not worth what the owner paid for it. On the other hand, the previous owners got out on time and if they didn't turn around and buy something overpriced themselves, made a good deal of money.

This economy doesn't have the hallmarks of greed and over-leverage as the economy of 10-15 years ago, but if you're contemplating making a move, do so and look forward and don't think about trying to time the market.

Alma Laque · Answer

@Bob Okenwa   Wise words.  We just talked to our realtor and we think we are going to go ahead and take the plunge.  Sucks, but as you stated, we are looking forward and I think once we find a new house to move into and have all that extra cash to invest elsewhere, it will help our feelings about it.  :)  Its hard when the only thing we have to look forward to is cash and no house to look fwd to!