We’ll just come right out and say it: sometimes, investments go south with no hope of bouncing back, or, no want from the stockholder. When it comes to investment properties, anything can happen that will tank their value:
- Bad economy
- Location losing buyer interest
- New developments
- Increase in crime
Many landlords rely on their investment properties to make a living, which is why they need to stay on top of it when an investment goes bad and has no hope of recovery. When that happens, they have little choice but to consider selling their property to another buyer, whether they are a landlord, contractor, family, or home buying company. No matter who you sell it too, use these five tips when selling your investment property to get the best deal.
Tip 1: Use High-Quality Videos and Photographs
Everyone who has bought a home knows how important high-quality photos and videos are. A picture is truly worth 1,000 words in this instance – it helps a potential buyer visualize their new home. A bedroom all set up helps them see their child playing on the floor, their family dinners around a table, and enjoying their backyard oasis.
A video can say all of that in 10 seconds!
Unfortunately though, videos and photos work best when the home is staged, renovated, and repaired. Most families want something that is move-in ready and will pay the premium price for it. However, to get to that premium price, you’ll need to put in a lot of time and money to repair and update the home.
Some repairs could be simple, like re-mounting a door or painting a room, while others can cost you thousands. For example, kitchen remodels can range from $13,365 to $37,800, depending on what you need to do to it.
You can market the home “as-is,” but high-quality photos and videos will turn away a lot of buyers who don’t have the experience or desire to put in the work. Keep this in mind with tip 2 as well.
Tip 2: Create A Virtual Tour
The more information you provide online shoppers about your property, the easier it will be for buyers to make a decision. One of the best ways to do this is to make a virtual tour of the property.
Virtual tours help on all fronts: from visualizing the potential of a fixer-upper, to helping a family understand the layout of their potential new home. This is a huge win too if the home is out-of-state and you can’t provide tours to the new family, or they can’t travel to see it in-person.
Tip 3: Learn the Relevant Tax Laws
Selling investment properties is more expensive than selling a regular home. The taxes on the sale of a rental property are more than those for the sale of residential units. Within this context, everyone considering the sale of a rental property should know about Section 1030 of the US tax code. Being knowledgeable of this tax code can help you avoid a loss on the sale of a rental property or a negative return on investment.
Tip 4: Consider the Timing of Your Sale
Most landlords will know to hold onto an investment property for more than a year so they can avoid short-term capital gains. You don’t want the money you’ve made from the sale to be tacked onto your overall income and taxed accordingly, after all.
Long-term capital gains — applicable to properties owned for longer than one year — will be taxed at 0%, 15% or 20% (contingent on your tax bracket). Thus knowing when to sell your rental property can make a difference of thousands of dollars.
Additionally, there are ebbs and flows to the home market. You’ll want to sell when investment properties like yours are in high demand.
Consider the lease terms too. It would be easier for everyone involved if you chose to sell your home toward the end of your tenant’s lease, even if you plan on selling it to someone who will keep tenants in place. You are not obligated to do this, but it gives you more time to focus on the sale instead of following the legal procedures to break lease with your tenant.
Tip 5: Sell Your Investment Property for Cash
Or, you know, you can avoid doing all of that when you sell it to Property Spot. We keep your tenants in place, guaranteed, and we don’t require any repairs, renovations, or photography. We’ll send an agent out to look at the home, if possible, to get a feel for the size and layout, and then send you a fair cash offer in 24 hours or less. If you accept the offer, you can pick the closing date as well.
It’s really that simple. You can learn all Property Spot’s easy process here, or you can give them a call at 480-400-7792 to learn more.