Last Updated: January 2024
Selling a rental property requires a strategic approach, combining market analysis, timing, and presentation to attract potential buyers. It involves understanding the nuances of investment property sales, property valuation, considering factors such as location, condition, and current market trends to set a competitive price.
13 Steps – How to Sell a Rental Property?
Selling a rental property involves a series of steps in order to get top dollar selling price. From accurately assessing the property’s value, to closing escrow with the right buyer, there are several steps that owners must follow in order to successfully sell their rental property for the highest price. Below we take a look at 13 steps to help owners navigate the process of how to sell a rental property:
1. (Optional/Recommended) Hire a Real Estate Agent
A good real estate agent associated with a reputable brokerage can net you far more than their commission when selling a property. Their market knowledge and negotiating skills to help overcome any inevitable challenges that arise in the selling process.
2. Assess the Property’s Value
Your real estate agent should be able to accurately determine the property’s current market value and identify any issues that may need to be addressed before listing.
3. Consider Tax Implications
Consult with a tax professional to determine any tax liabilities associated with the sale of the rental property and to explore potential tax benefits.
4. Check Local Tenant Laws
New buyers may want the property vacant or a particular tenant out. Be sure to check local landlord-tenant laws to understand what is allowed, not allowed, and may be required to relocate tenants.
5. Determine Your Selling Strategy
Decide whether to sell the property as-is, with or without tenants, or to make any necessary repairs or upgrades before listing.
6. Prepare the Property for Sale
Clean and declutter the property, make any necessary repairs, and consider staging the property to attract potential buyers. Sometimes small repairs such as landscaping and painting can provide tremendous ROI on the listing price.
7. Set the Asking Price
Determine a fair asking price with your real estate agent, based on the property’s value and comparable sales in the area. Too high of a price can scare away potential buyers, and too low of a price can potentially leave money on the table.
8. List the Property
Your real estate agent should advertise the property through multiple channels, such as online real estate platforms such as their MLS, social media, colleagues, and their personal network of investors.
9. Show the Property
Your real estate agent will schedule showings and hold open houses (if applicable) to give potential buyers a chance to view the property. If it is a commercial property or not suitable for open houses, your agent will likely do private scheduled tours.
10. Receive and Review Offers
Review offers and negotiate terms with potential buyers until you reach a mutually agreeable price.
11. Enter Into a Contract
Once you have accepted an offer, enter into a legally binding contract with the buyer.
12. Escrow, Contingencies, and Inspections
Once there is an agreed upon contract, both buyer and seller go into escrow which can usually be 30 days or longer. During his period, there can be contingencies that may be satisfied, and the buyer usually performs physical inspections while working through a series of administrative requirements including satisfying loan approval conditions and completing a title search. It is also during this time that an appraisal is ordered by the buyer.
13. Close the Sale
Complete any final repairs or preparations, legally transfer ownership to the buyer, and receive payment for the property.
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