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Best tips for selling your rental property

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Owning rental property can be an excellent way to create a second or third source of revenue. While many investment property owners find satisfaction in renting out homes to tenants, it can also be challenging. In addition to managing unruly tenants and repairs, landlords need tenants who pay on time each month so they can pay the mortgage and cover other expenses.

The COVID-19 pandemic made owning rental property difficult for many owners, particularly following government mandates preventing evictions.

Selling a rental property can be difficult and time-consuming, particularly if you own multiple properties and/or the houses need extensive repairs. When you’re ready to sell, here are a few tips to keep in mind:

Don’t forget capital gains tax:

There could be significant tax implications when you sell your rental property. If you plan to sell, you’ll want to know about the 1031 exchange, which could help you defer a rental property tax. If you profit from your sale, you could face a 15-20% capital gains tax. The 1031 allows you to delay paying taxes if you use the income to reinvest in another property. You should consult your accountant for more information about how selling your property could affect taxes.

You don't have to kick tenants out

Rental properties may be sold even while tenants occupy the property. Your options depend on the type of lease you have. The most common leases allow tenants to remain in the home for the remainder of their lease term. Some buyers are interested in tenant-occupied properties since they won’t have to worry about finding a renter right away.

If tenants are on a month-to-month basis, you can give them notice. Typically, you’re required to provide 30-60 days’ notice.

Make sure you communicate with your tenants. Even if your current tenants will stay in the property once you transfer ownership, they should know that they’ll be dealing with someone new in the future.

Managing showings

Most leases require tenants to allow walkthroughs. Homes that are clean and adequately cared for typically fetch higher prices. While your contract may require that the tenants allow walk-throughs, you can help maintain a good relationship with the tenants with a bit of consideration.  In addition to providing at least 24-hours’ notice of any walk-throughs, you could consider offering incentives to ensure the home is clean and tidy when potential buyers come through. Additionally, you could offer to put the tenants in a hotel when you hold an open house. The key is to make sure your tenants are considered. It’s uncomfortable having strangers traipse through your home. Compassion will go a long way towards getting your tenants to help make your property more attractive to buyers.

Consider selling to your tenant

You may consider asking tenants with a good payment history if they would be interested in purchasing the property from you. This situation could benefit both parties since you won’t have to list your home, and your tenants won’t have to worry about moving.

Sell your property for cash

Selling a rental property can be time-consuming, especially if you’re trying to sell multiple properties. And, if you need to sell quickly, listing the property on the traditional market might not work. If you’re facing difficulties keeping up with you may need to consider selling the home to a cash buyer.

Brick purchases properties for cash. We’ll help you avoid open houses, walk-throughs, and inspections. Selling to a cash buyer like cash also means you won’t have to worry about making expensive repairs or worrying about inconveniencing your tenants.

We know that the last two years have been hard for many people. Landlords have been hit particularly hard because of eviction moratoriums. If you’re ready to liquidate your real estate property and you want to move fast, reach out today. We can get you an offer quickly, and we’ll help make sure you and your tenants have a smooth transition.

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