You’ve spent years collecting rent, and now you want to sell your rental property. There are a few things to think about before you put your property on the market, especially if you have tenants with leases, or repairs or renovations that need to be completed.
As rental property owners ourselves we’ve dealt with these kinds of situations, so we’d like to share some guidance to help you determine the best way to move forward with the sale of your property.
The good news is that you have options! You just need to determine the most important goal of selling your property. Is it to make the most money possible? Do you want a hassle-free sale that is quick? The answers to your questions can determine your next best steps.
Regardless of whether you are an energetic landlord excited to take on a sales adventure or a tired landlord who wants to sell and can’t wait to have someone else deal with your property, read on to learn everything from how to get the highest price, to what you need to do today to sell.
As a landlord, you have 3 main choices to get your rental sold
1. Vacate tenants, remodel, sell retail (Highest price, most hassle, most costly)
Selling traditionally in the retail market will give you the highest price. However, it comes with a few requirements.
Buyers who plan to live in the property themselves will expect a clean and repair-free house; very few want a fixer-upper, or to deal with tenants. Especially if they need to wait for the tenants’ lease to expire before they can move in. To get the highest price for your property you’ll need:
- No tenants when you list.
- The house to be clean and free of clutter.
- The property to be in good condition and fully or at least somewhat updated (we’ve written a helpful blog that outlines the repairs and remodels that will give you the most bang for your buck when you sell).
- Patience to wait for a buyer to make an offer and confirmation they have the funding to buy it.
2. Vacate tenants and sell as-is to an investor (Some hassle, lower price than retail)
This option will likely garner a lower sales price than selling retail and you’ll still need to find a way to vacate your tenants. It could be an ideal scenario if the lease for the current occupants is almost up, and you don’t want to invest time or money into making repairs or updates to the property.
One caveat to vacating tenants before you sell is if you are selling a multi-family property. In this case, having long-term, responsible tenants who pay their rent on time could be an incentive for an investor to purchase your property. This demonstrates the income potential and reduces the buyer’s need to fill vacancies right away.
3. Sell with tenants, as-is (No hassle, lowest price)
Some people (but not very many!) will be happy to buy the house with tenants. However, this is (typically) the lowest price you will get for the property and will often come from investors who know what it takes to repair, update, or fully rehab a property. The lower sales price may be worth it if your life is hectic, and you don’t want the hassle and headaches of selling your property.
There are some investors (like us), who do everything we can to create a fair offer regardless of whether there are tenants. You can call us anytime to find out what we can offer on your property: 402-313-8700.
Additional considerations when selling your rental property
1. If you have time and patience your best bet is retail.
If you have time, consider selling your home the traditional way: vacate the property (hopefully the tenants will leave with no problem), remodel/update, clean it up, and list it with an agent. This process will most likely take a couple of months (depending on how many updates it needs, and how quickly you can vacate your tenants).
After listing, you’ll need to wait for the right buyer to come along and hope that their financing goes through. If your home is going to sit vacant for a while, keep a close eye on it if possible, and in the meantime, check out our article on how to prepare a vacant house for sale.
2. Evicting a tenant can be costly in time, money, and patience.
If an official eviction is the only way to vacate the property, you will need to decide whether the cost of legal fees and added time to go through the eviction process will be worthwhile in your situation. A word to the wise: Landlord-tenant laws vary by state and the eviction process can take weeks or even months to complete.
3. Know the hidden fees.
If you are planning to sell your home the traditional way, you’ll have to pay a good amount in agent fees and closing costs.
At Anna Buys Houses, as with many direct home buyers, WE PAY for your closing costs, and you’ll pay no commission and no fees. This can save a significant amount of money that helps off-set the lower sale price.
In sum, when you are ready to be done with your rental property that has tenants, you have options when it comes time to sell. Depending on your situation and goals for selling the property you may choose to wait, make repairs, and sell retail…. Or sell to an investor who will buy as-is and relieve you of the burden of being a landlord.
To get a no-obligation, cash offer on your property today (with no hidden fees and with or without tenants), call Anna today at 402-313-8700!