Pro Tips for Selling Your Investment Properties
There are two reasons why people buy investment properties; to earn rental income and for capital gains. This means that the time comes in the life of every property investment when it has to be sold.
The reasons why people choose to sell investment property vary. It could be because they want to retire from the rental property business. It could also be that the value of the property has appreciated significantly and they want to cash out. Or it could be because they want to invest the proceeds from the sale of the property in a bigger property.
Regardless of what your reasons are for wanting to sell, one thing is certain. You want to make as much money as possible from the sale. But you can only do this when you know how to sell an investment property.
The challenges of selling an investment property are different from what you will encounter when selling your private home. And if you are not aware of the peculiarities of selling an investment property, you may lose money. Or even worse, you may find it hard to sell the property.
UpkeepMedia.com will guide you through the important things you should do to make the most profit when selling an investment property.
1. Set the right price
What should be your selling price? Set a high price and you will scare buyers away. A low price and you will lose capital gains. To get the best price, you should do a comparative market analysis.
What did similar homes in the area sell for in recent months? Set your price a little lower than the home is valued at. This will help you attract buyer's attention. In the process of bidding, they may push the property's price to its actual value. But even if this doesn’t happen, you will gain more if you sell the home quickly.
2. Make the right first impression
When selling a property, the perception you create in buyers' minds is critical. Buyers form their opinion the minute they set foot on the curb of your property. To make the best impression focuses on cosmetic updates, but more importantly, do the necessary repairs.
This means that broken windows, worn carpets, and broken appliances should be replaced. It also means painting walls, de-cluttering spaces, and keeping the home show-ready at all times. Make a daily effort to keep the home in the cleanest and tidiest state possible; in readiness for buyers.
3. Make the kitchen and bathrooms a priority
Kitchens and bathrooms sell houses; they influence people's decision s to buy or rent a home. If possible, do an update of the style and design of the kitchen and bathrooms. Replacing countertops, updating vanities, and changing plumbing fixtures is recommended.
If this is not possible, a new paint job and thorough cleaning of the kitchen and bathrooms should be done. Replacing old appliances and changing worn-out handles will improve the appeal of the kitchen and bathrooms.
4. Study the local housing market
The buyers of your property will also want to rent it out. They will be looking beyond the price and condition of the building. Buyers will also be concerned about the real estate opportunities in the area.
What is the employment market in the area like? Are there companies' headquarters nearby? Is there a college campus in the area? You will sell your property faster if you provide answers to the questions potential buyers may be asking. By incorporating this information into your marketing, you give your property a bigger selling point.
5. Maximize rental income and minimize expenses
Buyers want to see proof of the real estate opportunities in an area through the actual amount of rental income you generate. They also want to know that the maintenance costs of a property will not be excessive.
A well-maintained property tells buyers that renters will not be in short supply and that the home will continue to appreciate. If a property meets buyers' requirements in terms of rental income, maintenance cost, and a promise of capital gains, they will be much more interested. Making the cash flow on the property available to buyers can be your best ad.
6. Know the applicable tax laws
Knowing the relevant tax laws will help you avoid paying too much in taxes or paying taxes at all. By using the right tax code, you can defer paying capital gains tax on a property; if you use the funds to acquire a similar property. Taxes can make the difference between selling for profits or at a loss.
7. Stage the property and take professional photos
Set up your marketing to make the most of how properties are marketed and sold today. First, stage the home to make the greatest visual impact on buyers. Second, have professional photos of the staged home taken. The reason for this is almost 90% of prospective buyers will first encounter your home on the internet. And when selling online, image is everything.
8. Call Your Local REALTOR® at Green Haven Realty
We're real estate investors as well as licensed REALTORS®, so we know how to make an investment property sell. We've done it ourselves many times! Whether it's pricing, staging, kitchen and bath recommendations, or local market data, we have the knowledge and experience to point you in the right direction. Call or text us at 336.462.9544. We're here to help!