Individuals choose to invest in rental properties for different reasons. Some decide to upgrade to a new property or move out of the area and choose to retain their old residence as a rental. Others decide to make a business out of rental property ownership and purchase houses for the sole purpose of investment.
Regardless of how you became the owner of a rental, the business of being a landlord can have its ups and downs. Sometimes, the most reasonable choice is to let a property go because it no longer makes good financial sense. Many factors go into helping individuals decide when to sell rental property investments, so following a few tips during the decision making process can help make the process more seamless.
When To Sell a Rental Property
If your rental property is still working well for you, you may make the decision to hold onto it for a little longer. Make sure you are doing a regular analysis to see if your investment property is still providing an income stream or source of profit for you.
When you factor in expenses, repairs, tenant turnover, or fees paid to property management companies, it’s possible that your investment property is not working for you as well as you think. Take into consideration the advantages and disadvantages of holding onto your property for longer versus getting it ready for selling.
Some individuals choose to simplify their lives by unloading rental properties as they near retirement, since the passive income source may no longer be needed. Ask yourself several questions as you weigh the pros and cons of selling your property.
- Is your property still turning a profit, or have the maintenance costs and other expenses eaten up most of your earnings?
- Is your property a past home that you would be keeping until the market rebounded, and has the value increased to the point that you can sell?
- Are property management costs continually rising, making the gap between your rental income and your costs smaller and smaller?
- Do you have continuous problems with tenants or tenant turnover, making your experience as a landlord stressful?
- Does the property need so many repairs that it will be hard to rent the next time a tenant vacates?
- Did you purchase the home solely as a rental, or does it have sentimental value to you?
How To Prepare a Rental Property for Sale
During the process of deciding whether or not to sell your income property, you will need to factor in the preparation process. There are many different methods of selling a property, including selling on your own, listing with a real estate agent or selling to an investor. Before you list your property for sale, take some time to think about how much work you want to put into the process of fixing up and selling the house.
If your home has been a rental for a long time and has significant damage, it can be difficult to repair the problems before putting it up for sale or renting it out again. Determining how to sell a rental property is a multi-step process involving numerous factors for consideration.
Examine the market to get a good idea of the current market value of your property. Compare your home to others of similar size that have sold in your area, since overpricing your home will make it sell more slowly or not at all. You can also use online real estate sites for estimates, but realize they could be inaccurate with comparisons.
Determine whether the necessary repairs can be completed with the tenants still in place or if you need to wait until the rental contract is complete to start them. Selling with a renter still in place can eliminate a large number of potential homebuyers, but waiting until tenants have moved out means you will not have any rental income coming in during renovations. This could mean months of multiple mortgages plus the cost of repairs.
Decide how you want to market your property. Do you want to try to sell it yourself, in a for-sale-by-owner situation? If so, you need to devise a marketing plan that includes where and how to advertise your property.
Options include online advertising with social media or real estate websites and holding an open house to show off the property in person. If you choose to list with a real estate agent, factor agent commission into your overall financial plan for the property. In many cases, a property in need of repair or fast turnover is best sold to a real estate investment property like Core Properties for simplicity and for fastest turnover.
Status after selling
Are you the owner of several investment properties, or do you only have one? Are you planning to invest in more properties, or are you getting out of the market completely? If you have plans to be a regular investor with multiple properties, your approach to selling one property may be different than someone who plans to make a career out of property investment.
Tips for Selling a Rental Property Quickly
If you have an investment property you are considering selling but are worried about the time and cost it will take to prepare it for the real estate market, your best avenue could be selling it to an experienced investor. Real estate investment companies have several options for you that are beneficial to everyone. In some cases, the investor will purchase your property completely as-is and keep it as a rental, which means the entire burden of the leasing process will be taken off your hands without having to make any updates at all.
In other cases, the investor who purchases your as-is property will then make necessary repairs and renovations and place it for sale on the real estate market. Another option is for individuals who still want to own rental properties but are interested in selling just one of them. There are tax breaks for those who sell one rental property and immediately invest in another one.
In any of these cases, working with an investor means you do not have to worry about costly repairs or the cost of paying the mortgage on a vacant home while you are trying to sell it on the real estate market.
Why Choose Core Properties
When it comes to choosing an investor for your property, the process needs to be spelled out clearly to take the stress and worry out of the process. Core Properties makes the entire experience as hassle-free and stress-free as possible by simplifying the steps from start to finish. After discussing your rental property with Core Properties, a team member will come out to view and analyze your property.
Shortly after, you will be made a cash offer that is based on the current condition of the home without any repairs or changes needed. Once a deal has been made, the closing process is fast and efficient, leaving you unburdened and with cash in hand.
If you are ready to begin the process of selling a rental property and want to work with a reliable and professional investment company, contact Core Properties today for further information about their services or to schedule an appointment for property evaluation. Call: (314) 356-9052