There comes a moment for each and every real estate investor when you think about selling a rental property. Maybe your priorities shifted and you’re turning your focus on another type of market or type of investment property. Maybe an unforeseen turn in circumstances results in a need to sell your property. Maybe this specific property just isn’t working out for you. Whatever your reason, either you need or want to sell!
5 Essential Things to Think About Prior To Selling Your Rental
But wait-is that really the most appropriate for you and your financial future at this time? Regardless of what the situation is or factors behind your need to sell, taking a moment to take into account all of the options and the entire situation may prove invaluable.
When you’re tired and frustrated with a property and just want it gone, it usually is tempting to simply do whatever it takes to eliminate it. And in the process, you wind up losing out on profits.
Rather then scrambling to get rid of an unwanted property, stop and weigh these five vital considerations first. It is crucial that you take a pause prior to making a move!
1. Is the market in my favor?
There are two major factors that will play into this. One is the complete seller versus buyer’s market. Which are you in right now? If you’re in a buyer’s market, it could be a harder and longer road for less payout than you have been anticipating. It’s also something that you can’t really control-if you can’t afford to wait it out for whatever reason, you can’t. And that’s fine! Ensure that you recognize it and plan accordingly.
If you’re in a seller’s market however you are trying to sell a property which is occupied by a resident, you could possibly have a harder time obtaining the highest price and best value for your property. Regardless of how well your property was managed, you’ll encounter costs incurred by the new owner as they purchase the property. There might even be deferred maintenance conditions that will need to be addressed. These include issues that you will be required to face as a seller if you want to move the property quickly.
Another consideration is season. Certain seasons are found to be better for buying a home as opposed to others. It’s far easier to get good curb appeal in spring and summer as opposed to winter.
Buying a home is simply bigger in the warmer months. Make the most of that, and avoid putting your home on the market in the dead of winter unless you absolutely will have to. That’s when you should be looking to purchase, not sell.
2. Exactly what does the competition appear to be?
Whether you’re in a heated market or not, your competition matters! Don’t forget to research your options if you’re considering selling (or buying) an investment property. Exactly what are comparable area homes listed for? What did they sell for? What edge did they have over your property, if any? Don’t waste your time attempting to compare your property with a newly renovated, retail-priced property either. That’s where lots of investors create false expectations by convincing themselves (or being convinced by others) that their properties have greater value.
Provided you can find properties in the same condition (meaning occupied if yours is occupied or between residents if your property is between residents, etc.) locally which have sold or are listed, those are the comparable sales you are interested in or the competition you ought to monitor.
Consider every one of these factors! Evaluate the homes that will be on the market while yours is. The very same shoppers that are looking at your property will probably be considering those, too. Once you know what’s out there, it is possible to better understand how to properly price your property and what the selling point of other area properties are-so you can gain a competitive edge.
3. Where can I increase my value before I sell?
There’s no harm in trying to squeeze more value out of your investment before you decide to let go of it. If it’s been a headache for you, perhaps you don’t wish to throw a lot of cash at it just before you sell. But there are several small, low-cost updates and renovations that can really give you a solid return on your investment.
At a minimum, they can lend you a lot of aesthetic appeal, a thing that is often very powerful whenever you show a home to buyers.
Consider things such as paint, new fixtures, flooring updates, lighting, and the little details that make a big impact. You don’t need to go into a huge renovation if you don’t prefer to, and you may be unable to with residents occupying the home. For anyone who is between residents and have simply had enough of the investment or have to move quickly, you do not do any major renovations (though a kitchen or bathroom update can certain have a significant impact on your property value).
4. Is my curb appeal up to standard?
You will find so much power in having great curb appeal. It’s a lot simpler for an investor to have a clean, clear home to present than for a traditional seller who may still have a home full of furniture. This holds true for the investor who would like to sell their property while it’s occupied. It’s tough to spruce a property up while occupied.
Outside curb appeal, however, can take place whether a property is occupied or not. Trimming bushes and trees away from the roofline, windows, and doors can open up a property making it inviting to a prospective buyer. A fresh coat of exterior paint and fixed up wear and tear issues ought to go far in enticing a new buyer. New house numbers, fresh shrubbery and mulch, as well as a new mailbox are small gestures that make a property look more inviting.
Let’s say you sell an investment property and expecting to attract a new investment buyer, this is a great solution to showcase your property. All things considered, a property that is well kept and cared for doesn’t just attract interested investors; it’ll also attract and keep residents.
5. Where am I prepared to negotiate? Where am I not?
All of us have a breaking point. You should know where yours is before getting deep into negotiations. What offer is too low for you? Exactly what is absolutely off the table? Where are you will to work with the buyer? Be considering every one of these things!
Weigh for yourself just how much you would like to be rid of your property so that you could move on to the next thing. You have opportunities awaiting you and something potentially stopping you. You could possibly be in a situation where you have got to move quickly, which can be a far better reason to take a breath initially and determine what your limits are at this point.
Only you can answer on your own what price is too high and what sacrifice is too much to get there. It’s just far, far better that you know the answer prior to the offer is on the table.
Selling an investment property, especially before you want to sell it, can be difficult. While we own property, it may possibly have a great deal of value. If it’s not performing up to your expectations, it may possibly lose its value. In any event ., as investors, being forced to move quickly on an investment that we could possibly have expected to be long-term is usually a shock. Invest some time and don’t rush. You’ll find multiple options and they’re going to all be there if you find yourself ready and have your strategy ready.
Ready to find out the current market value of your investment property? Nick & Cindy Davis with RE/MAX Premier Group are here to assist you. We are always a just a click here away or call 813-300-7116