Most landlords reach a point in their career where they decide to sell their property.
Maybe you want to invest your time and energy in another industry. Maybe you’ve decided to buy property elsewhere. Or maybe you just want to capitalize on a property that has appreciated over time.
Whatever the case, you need to know the proper steps to take before selling your property. In this article, we’ll walk you through six steps every landlord should complete before a property sale.
- Choose the Right Time to Sell
In order to benefit the most from your property sale, you must pick the optimal time to sell. Here are four signs that it might be the right time to sell:
- High demand for housing – if there are a lot of buyers in your area looking for housing
- Local trends – if there are abundant job opportunities, population increases, or new laws that might bring buyers to your area
- High equity level – if you have substantial equity in your property thanks to appreciation or amortization
- High interest rates – if you’re paying higher than average interest rates on your property and can’t refinance
- Communicate with Your Tenants
As soon as you’ve decided to sell your property, you should let any active tenants know. A property sale will be an inconvenience for them with frequent entries, repairs, showings, and a new contract should they choose to stay.
Being communicative with your tenants is not only respectful, but it helps ensure their cooperation. An uncooperative tenant will make this process much more difficult.
- Make Repairs
A property in need of serious maintenance and repairs is not appealing to buyers. As such, when preparing a house to sell, it’s your responsibility to make necessary repairs before listing it.
Start with a pre-listing inspection to identify any problems or repairs that need to be addressed before you put your property up for sale. Potential repairs might include servicing the HVAC system, fixing appliances, replacing locks and hinges, cleaning the carpet, and replacing light fixtures.
If your unit is vacant, making repairs is fairly easy. If you still have a tenant living in the unit, however, you’ll have to coordinate with their schedule so you can come in and make the repairs. You shouldn’t avoid repairs just because you have an active tenant.
- Make Renovations
Renovations can be a good way to increase the appeal and monetary value of your property, so it could be worth tackling more extensive renovation projects if your unit is vacant. These might include repainting, installing hardwood flooring, or adding property management tech to the property, such as a smart thermostat or a video doorbell.
- Advertise and Show
When it comes time to list your property, you need to hire a real estate showing agent. Not only will an agent be able to offer you advice for advertising your property, but they also have access to great resources such as the Multiple Listing Service and investor databases, which can help you find a buyer.
As experts on the local housing market, real estate agents know what buyers in the area are looking for, and they’ll be able to best communicate what your property has to offer. Furthermore, they know the proper house showing etiquette for when potential buyers come for showings.
- Choose a Buyer
There are several different kinds of property buyers. Buyers can be house hunters looking for a place to live, a current tenant who wants to purchase the property from you, or another real estate investor hoping to rent the property out.
Although a viable buyer just needs to have the means to pay your asking price or negotiate a new one, you might have active tenants to consider. Another real estate investor is generally the most beneficial kind of buyer for you and your tenants. If an investor willing to take on active leases buys your property, your tenants won’t have to move. Furthermore, investors are oftentimes willing to pay more for the property if it comes with reliable tenants who pay rent on time.
Preparing your rental property to sell is a multi-step process. There’s more to it than simply listing the property online. You must communicate with your tenants, make repairs and renovations, and hire a real estate showing agent. There are also strategic considerations such as timing and the type of buyer. By following the six steps outlined in this article, you can help ensure that your rental property sale will go smoothly.