Having an emotional attachment to a home is completely normal, especially if you’ve lived in the home for many years or invested a lot of sweat equity into making it your own. But having an emotional attachment to an investment property will usually cause more headaches than it’s worth.
If you’re like the majority of property investors, you’re buying a rental property to build your wealth and future financial security. Any emotional attachment to a property will only distract you from making sound investment decisions. It will cloud your judgement over such things as rent rates, when to sell the property, and the amount of money to invest in upgrades.
So, what should you do if you realize you have an emotional attachment to an investment property?
Make Your Investment Property Work for You!
Remember that smart real estate investing is all about the numbers. Do your numbers add up? All the properties in your real estate investment portfolio should be achieving a capitalization rate (cap rate) of between 4% and 10%. See this past blog post for more about cap rates.
In other words, you need to apply the same investment logic to your rental properties that you do for your other retirement investments. For example, if a fund in your IRA was under-performing, you’d quickly sell it. You wouldn’t hold onto it as it lost you money because it was the “first fund you ever bought” or you “liked the name” of it. That would be silly and disastrous.
That same financial logic needs to apply to any real estate investment property you own. If a rental property isn’t performing in the short to medium term, you should seriously consider selling and replacing it with an asset that will give you the financial return you need. By keeping the numbers top of mind and the number one priority, you can overcome any emotional attachment that could hold you back.
Remember, you can find many great tips for investors, home buyers, and home sellers on our Facebook page. If you’re searching for the perfect investment property to buy, we can help! Contact us today!