Selling Residential Income
Selling Residential Income
If you’re asking whether you should sell your rental property and how to do it, we’ve outlined 3 different scenarios below and 3 tips when selling. We have a special place in our hearts for Rental Properties. Call us 208-734-7007
It's not generating revenue
1. Rental properties are only great when they generate revenue with as little work as possible on your part. If your rental property is becoming more expensive to maintain than it’s earning, you might consider selling. When expenses relating to the property and the money you’re getting in return don’t match up, it’s time to take another look at things.
However, keep in mind that a rental isn’t always immediately profitable.
You might need to fix it up and advertise it before you can fill it, and you won’t start seeing any real profit until after your tenants have paid up for a few months.
If you’re still seeing low profits (or even worse, losing money) after you’ve been renting the property for a while, you might have gotten yourself into a situation that’s seemingly impossible to fix.
You can raise the rent, but if you raise it higher than what people are paying for similar properties in your area, you’re never going to be able to fill the property.
When this happens, your best choice is to sell the property to someone who’s prepared to solve the problem – particularly if they have enough money to wait out a tough period or make the changes to the property that would justify a rent increase. With this route, at least you’ll get some of your money back and leave the problem to someone else.
Why Sellers Choose Us?
We are one of the Top 100 Sales teams in the Nation according to Realtor Magazine. We have the expertise to find you a buyer for your Rental Property. We’re here when you need us. Feel free to call, come into the office or email us and we’ll ensure a quick response time.
You live or need to move out of state
2. It’s hard to remotely manage a rental property. You can’t keep coming back and forth to meet with your tenants but the travel and maintenance costs can significantly outweigh your profits. We have a special place in our hearts for Residential Income. Call us 208-734-7007
Hiring a Property Management Company
When you hire a property management company, you’ll still need to deal with them. Most of them will handle properties for remote owners, please see Lezamiz Property Management for more info if you’re looking into moving out of state. We can handle your personal home sale as well as getting you set up for managing your property locally. Please also check out our Relocation page for tips.
Selling your Rental
When you sell the property, you can be completely done with it. You can take whatever money you make and use it for relocation costs or for another investment. This way you can simply be done with it and won’t need to deal with it anymore.
Your Tenants are driving you crazy
Not all tenants are respectful, abide by the lease, and pay on time.
Most tenants are easy to deal with for the first month, but things can quickly change once they settle in. If you feel stuck to nightmare tenants, you can evict them and go through the process of finding new ones, or sell the property altogether.
When you find new tenants, you have no guarantee they’ll be on their best behavior. Especially if the property is in a less than ideal area. Though it’s not probable every tenant who lives in your rental will be terrible, many people who have experience with bad tenants find themselves burned out on land-lording.
Some tired landlords sell their properties to investors. Investors can help get terrible tenants out of the property by paying them to leave or providing you with resources to expedite their eviction when they’ve violated the lease. They’ll also purchase the property even if the tenants have damaged it.
Why Sellers Choose Us?
Unlike some real estate companies, we do not require buyers to sign any contracts to show your Residential Income Properties to them.
Your Property needs major repairs
3. Properties need a lot of maintenance, especially if they’re older. Some of the wear and tear is normal, and it won’t be your tenants’ fault. You’re responsible for fixing the property. An old roof, old AC/Heater, or a flood from a plumbing failure are costly problems to fix. If you have issues that are too costly to fix then you may have trouble making profit in rent.
Selling your property in as-is condition, will get you off the hook quickly. Someone else will assume the responsibility of repairing the property, and you won’t be bleeding money. You can take the money you’ve earned and use it to buy a property in better condition, or invest it into a different venture.
Fix the issues your property has
4. If things are wrecked, you may have a hard time finding a traditional buyer who’s willing to deal with it. Things like bad roofs and shoddy plumbing can be very off-putting to traditional buyers as well as some investors or property flippers.
Investors are often willing to purchase fixer-uppers, but there are some that won’t go near properties that are ransacked. If they do, they won’t be willing to give you nearly enough to cover your investment. You have a lot to lose.
In times of desperation, it may seem like a relief to take a rock-bottom offer and just move on, but you can get much more if you have a budget to make the needed repairs.
First, take an inventory of the big things that need to be done, and come up with a budget for serious repairs.
Fixing any potential property damages like termites, leaky plumbing, roof damage, or an old AC/Heater will determine what you may need to invest to get it market ready.
However, you’ll need to determine if these investments will be worth the cost. If not, even though you may not get market value for your home, selling to an Investor might be a wise decision to cut your losses.
Why Sellers Choose Us?
We’ll help you negotiate so that the final contract includes your best possible terms and conditions. We’ll help you coordinate and negotiate inspections. Once you have and accepted offer, we’ll track the progress until the property closes and keep you informed every step of the way.
Maximize the value of your property
5. If the home isn’t in disrepair, but you allowed you tenants to paint or make changes, what you’re left with is their taste. This can make it hard to see your property as the blank slate traditional buyers are looking for.
If your property is vacant and in fairly good condition, you’ll need to put some effort into the cosmetic elements of the home to get it market ready and presentable.
Paint, flooring, fixtures, hardware, and lawns can completely change a property for a relatively small amount of money.
If your property hasn’t been updated in a while, a small face lift can help it fit into the modern market. Properties that look clean and new move much faster on the market than ones that look tattered and worn.
If you’re considering an investor, (who typically buys a property in as-is condition) to buy your property without these cosmetic changes, keep in mind that they’re going to deduct the changes they’ll need to make from your offer.
If you can, you might as well handle things on your own and keep that budget for yourself.
How to sell your rental with Tenants
6. A tenant-occupied rental property can sell easier to an Investor because the buyer knows it’s already generating revenue. This assumes you have tenant cooperation (and a buyer who isn’t looking to evict the tenants and live in the home themselves).
Notice of intent to sell a rental property should be done as soon as possible.
Your tenants will need as much advanced notice as possible for any showings or even to prepare for a move. Some tenants will not want to live in a home that’s in the process of being sold. That will be discussed more in the next section.
Either way, empathize with your tenants and work with them to find the best solution. Don’t just provide them with your notice of intent to sell your rental property – give them incentives to work with you, such as gift certificates, a cleaning service, and alternative housing accommodations during open house weekends.
In fact, depending on your tenant relationship, it’s possible the tenant may want to purchase the property. This is a mutually beneficial situation because it skips a LOT of steps for both parties. Even if the new investor wants to maintain the same tenants, new leases will need to be signed. Otherwise, there’s the process of moving, showing, etc.
Ready to Sell?
If you’re ready, or just want to get ahead for when you are, then we’ll send Sid out to your property for a no-obligation walk-through and discuss your options to get top dollar for your property.