Should I Sell My Rental Property in Spokane? Expert Guide to Maximizing Profit
- Nick Briggs
- Mar 7
- 4 min read
Spokane’s real estate market is experiencing shifts in 2025, prompting many rental property owners to reconsider their investments. With fluctuating property values, changing rental demand, and evolving economic conditions, it’s crucial to assess whether selling or holding onto your rental property is the best financial decision for you.
Understanding the Spokane Rental Market
Current Market Trends
Spokane has seen steady property value appreciation over recent years. However, market conditions can change, influenced by interest rates, economic growth, and housing demand.
Rental Demand and Occupancy Rates
Spokane’s rental market has remained strong, but factors like population growth, job opportunities, and housing supply affect demand. Landlords should analyze vacancy rates and rental income potential before deciding to sell.
Economic Factors Impacting Spokane Real Estate
The city’s economic stability, employment rate, and cost of living directly impact property values and rental profitability.
When to Sell Your Rental Property
High Property Values: If home prices are at a peak, selling now could maximize profits.
Costly Maintenance Issues: Frequent repairs and high maintenance expenses can reduce profitability.
Declining Rental Income: Market shifts leading to lower rents or higher vacancies may signal a time to sell.
Need for Liquidity: Selling can provide capital for other investments or financial goals.
Tax Changes: Anticipated increases in capital gains taxes may make selling sooner more beneficial.
When to Hold Onto Your Rental Property
Steady Rental Income: If your property generates consistent cash flow, holding may be the better option.
Long-Term Appreciation: Spokane’s real estate has shown long-term growth, making holding a potentially wise choice.
Tax Benefits: Rental properties offer tax deductions, depreciation benefits, and potential 1031 exchange opportunities.
Low Mortgage Rates: If you locked in a low-interest rate, selling may not be as advantageous.
Pros and Cons of Selling Your Rental Property
Pros:
Immediate cash flow and profit realization
No more tenant and property management responsibilities
Ability to reinvest in better-performing assets
Avoiding future market downturns
Cons:
Capital gains taxes and transaction costs
Loss of passive rental income
Potential regret if property values continue to rise
Uncertainty of reinvesting proceeds successfully
Pros and Cons of Holding Onto Your Rental Property
Pros:
Continual passive income and property appreciation
Inflation hedge with increasing rental rates
Potential tax benefits from property depreciation and deductions
Option to sell later in a stronger market
Cons:
Property management responsibilities and maintenance costs
Potential exposure to market downturns
Limited liquidity compared to other investments
Rising property taxes and insurance expenses
Financial Considerations Before Selling
Capital Gains Tax: Understanding potential tax liabilities is crucial before selling.
Net Proceeds Calculation: Evaluate how much you’ll actually take home after potential agent fees, taxes, and closing costs.
Return on Investment (ROI): Compare the financial benefits of selling versus holding.
Alternative Investments: Assess whether reinvesting your equity elsewhere could yield better returns.
How to Sell Your Rental Property in Spokane
Hire a Real Estate Agent: A local expert can help you navigate the process efficiently.
Prepare Your Property: Make necessary repairs and stage the home for potential buyers.
Market to the Right Buyers: Investors vs. homeowners require different selling approaches.
Handling Tenant-Occupied Sales: Understand Spokane’s rental laws before selling with tenants.
Closing Process: Ensure all paperwork and legal aspects are handled correctly.
Alternatives to Selling Your Rental Property
Refinancing: Leverage equity for cash flow without selling.
Short-Term Rentals: Consider converting to an Airbnb or VRBO for increased revenue.
Property Management Services: Outsourcing management can make holding easier.
1031 Exchange: Defer capital gains tax by reinvesting in another property.
Seller Financing: Sell to buyers while earning interest over time.
Conclusion
Deciding whether to sell or hold onto your rental property in Spokane depends on market conditions, financial goals, and long-term investment strategies. Analyzing rental income, appreciation potential, and tax implications will help you make the right choice. Consult with real estate and financial professionals to determine the best course of action for your situation.
FAQs
What is the best time of year to sell a rental property in Spokane? Spring and summer typically see higher buyer demand, making it easier to sell at a favorable price.
How do I avoid capital gains tax when selling my rental property? Using a 1031 exchange, converting the property to a primary residence, or leveraging capital gains exemptions may help minimize taxes.
Should I sell my rental property if I have a mortgage on it? It depends on your equity and financial goals. Selling with a mortgage is common, but consider closing costs and remaining loan balance.
How do I determine if my rental property is still a good investment? Calculate cash flow, appreciation trends, and ROI to assess whether holding is more profitable than selling.
Can I sell my rental property with tenants still living in it? Yes, but you must comply with tenant rights and lease agreements. Selling to an investor can make the process easier.
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About Me
My name is Nick Briggs
Being born and raised in Spokane I grew up knowing what a special place this city is, and it was my dream to help others create a life in this wonderful community by guiding them in real estate. I spent many years in the customer service industry, the experience of listening and communication showed me how much I truly loved helping people. I attended Gonzaga University and earned a Bachelor’s Degree in Business Administration to add to my knowledge of guiding, managing, negotiating, and listening to individuals, helping them achieve their real estate goals.
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