What to Consider When Selling a Rental Property
For whatever reason, you have decided to sell your rental property. While this may be a sound business decision, you have a lot to consider before you begin the process or sign the final closing papers. Do it right, and you won’t have any regrets.
Informing Your Tenants
If your property is occupied, you will have to inform your tenants at some point. In multifamily units, it may not be a big deal. Chances are pretty good your buyer will continue to maintain the property in the same way and keep the same tenants as long as they are current on their rent.
Things could be much different in a single-family dwelling where the buyers could want the home for themselves. In this instance, you have to give your tenants an appropriate amount of notice.
A side benefit is that your tenants may be interested in buying. If you can offer incentives, such as paying part of the closing costs, you may discover a buyer. Otherwise, you may need to provide 60 days’ notice to be fair, even if the law in your state only requires 30 days.
Showing the Property
To sell the property, you will have to show it to prospective buyers — another good reason to let your tenants know. You need to find out what times are convenient for them and plan appointments during those times. Unlike homeowners trying to sell their own property, your tenants may not be as cooperative because it doesn’t benefit them for you to sell.
One way around this problem is to offer them an incentive. Perhaps you offer to deduct an amount from their rent in return for allowing a certain number of showings per month. Include one or two open houses in the deal, and you are more likely to get full cooperation if they agree. Make the deal even sweeter by providing an added discount if they find the buyer. This puts both of you on the same team.
Realtor or FSBO?
You will also have to decide whether to hire a Realtor or sell the property on your own as a For Sale By Owner. While hiring a real estate agent puts another person in the mix, it can also result in your property selling faster and for more money. The key is to hire someone knowledgeable about investment properties.
A real estate agent should know the legal details of selling an investment property. However, you should also talk with your lender about any ramifications of selling your rental and find out if there are any prepayment penalties or other concerns.
While many home sellers use an attorney when selling their homes, it is essential for a property owner selling a rental. Landlord and tenant laws vary by state, and you should find an attorney experienced in rental matters to ensure you don’t break any laws and end up being sued.
Selling a rental property is a major decision. You have to consider the tenants and all the legal issues that can result. The best way to navigate through this process if this is your first time is by working with an experience agent and lender to help you make the right choices as you sell your property.
Many times, there are issues between a landlord and a tenant that need to be resolved but are failed to do so, because both parties have gone too far with their actions, and have retaliated in the... More
Where there is a landlord, there will also be a tenant, and it is no surprise that these two parties can only work together once there is some sort of agreement, contract or a binding deal in place.... More
Many landlords find it difficult to write and draft a lease agreement. Since every State has its own general template, it can also be difficult to make sure your lease agreement meets all the criteria... More
When it comes to being a landlord, one should know that it is not for the unprepared individual. This should be clear that being a landlord does not simply mean that you will be taking the rent and... More
Becoming a landlord is a major deal and no one can simply get up and think, “well, yes I think I should be a landlord and rent out my flat.” If you are thinking that you would like to be a landlord,... More
If you’re a landlord and want to manage your business in a better way, you should endeavor to get in touch with those industry experts who have the experience and the skills to help you do it. This is... More
Landlords and aspiring landlords, do not become as such, without guidance and advice. There is a lot that goes into being a landlord nowadays; in fact, there is so much to learn that it often confuses... More
Renting out an apartment or a house can become a constant revenue source for landlords, but at the same time, it gives rise to several problems. It is a fact that high standards, a strict lease... More
If you are currently thinking of becoming a landlord only because it helps you have a constant stream of income, you should think twice. It’s not that you should not consider offering your property... More