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Preparing To Sell Your Residential Income Property

Selling an investment property can be a great way to build wealth, especially if you’re exchanging into a better-performing property, or moving up in scale. But before you start selling, there are some things to consider about the sale. These include making sure that you’re ready to market the property, and that you’ve done everything possible to ensure a successful, expedient sale.

Is the Time Right?

Deciding when to sell your investment property involves a number of variables, but there are two macroeconomic factors currently playing into the decision-making process, especially for investors with holdings in the state of California.

(1) Proposition 19 dictates that rental properties are re-assessed at full market value when an owner passes away, thereby making the property tax bills very expensive. Owners don’t want to burden their heirs with an investment that doesn’t perform well – or is even negative cash flowing — due to high property taxes.

(2) The real estate market historically trails the stock market, and as the stock market stumbles and bumbles through 2022, the real estate market will follow. Already the indications are there: “price improvement” and “price reduced” listings are becoming more common. Additionally, rental rates have seemingly hit plateaus. Some owners and property managers are reporting increased turnover as residents cannot budget for the increased rental pricing now kicking in.

Understand the Process

There’s no shortage of online tools that will help you prepare to sell your rental property, but working with a competent, experienced broker can save you from diving down internet rabbit holes. Your trusted real estate professional understands current market conditions and competitive pricing, so you will have a better handle on what you will net from the sale.

In addition, your broker can help you determine what investment property or properties to exchange into. They can help you scope out vacancy rates and markets that are on the rise in your target area. On top of all of that, an experienced broker can help you determine how to optimize the condition and appearance of the property and effectively market it to prospective tenants. They can help you make decisions about property management, finding the most reliable options in your chosen market.

Know the Market

Gone are the days when you could put up a For Sale sign and have Buyers offer 50% above the offering price. I was recently contacted by two separate owners who were concerned that their properties — listed with other brokers — were overpriced or not being properly marketed.

While the sky is not falling on property values, you do want to price competitively in this changing market. You want to understand how your property stacks up to the competition so that it’s not languishing for weeks or months. You need to know what kinds of properties are currently available, or soon-to-be available, and what they offer so that you can refine your property and make it stand out.

Prepare For a Successful Sale

Selling your property is about more than just listing it on the MLS (Multiple Listing Service) and Loopnet. You’ll also need to make sure your home is ready to show. Here are some tips to help you prepare the property for sale:

  • Organize the financials, including rent roll and profit and loss statement from the prior 12 months, at a minimum
  • Disclose any ongoing contracts: laundry, pest control, landscaping
  • Highlight improvements that you have made or features you have added in the past few years of your ownership
  • Similar to selling a personal residence, curb appeal is important in marketing your residential income property: updated landscaping, paint, and a space that is free of clutter are all desirable

Be Patient and Stay Positive

You’ve probably heard the saying “seller’s market” many times in the past few years; it means that multiple buyers are competing against other buyers for properties, thereby driving up prices. What we are seeing right now is a shifting market, where some of the power is moving from the seller side to the buyer side. Naturally, this makes sellers nervous, though much of the anxiety is unnecessary.

Part of the difficulty sellers are having has to do with unrealistic expectations fueled by the outsized returns of the last couple of years. While we’re not seeing some of the unrelenting demand of those years, we are still seeing a low inventory market with healthy levels of interest. That means that a well-positioned, well-priced, and well-marketed income property – apartment, duplex, triplex, fourplex, etc. —  is still going to sell in a timely manner.

Find a Broker Who Can Help You Succeed (Ahem!)

If you’re selling your property, you’ll need to find an agent with the know-how and marketing prowess to find the right buyer, one who will work with you to ensure that everything goes smoothly when it’s time to put your investment property up for sale. A great agent will take care of every detail so that you can focus on what matters most: getting top dollar for the sale of your current investment and deciding where to put your investment dollars next.

As one of the very few brokers in the S.F. North Bay to specialize in the sale of residential income properties, I have had the privilege to work with smart, classy, all-around-good people in buying and selling their investment properties. If you’re considering options, please don’t hesitate to reach out for a complimentary discussion.

נערות ליווי בתל באביב israelnightclub.com

30-07-2022

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