There comes a time for most real estate investors when they need to sell a property.
Maybe the rent yield is not as strong as it used to be or you just want to release the value to spend the cash elsewhere. Whatever your reason for wanting to see your property, there are some things to do first.
Here are four things that you should never forget about before selling an investment property.
Sort Out Things with Your Old Tenants
First of all, you need to think about your tenants. If you have a tenancy agreement in place, you can’t just sell the property if it will mean them getting kicked out.
They have a right to stay in the property. This is why it’s best to sign shorter tenancy agreements as they provide more flexibility. If you are selling to another investor, it might be possible to keep the tenants in place though.
Whatever arrangement you come to, you need to keep the tenants informed at all times. If you fail to do that, you could be open to lawsuits from them later on.
Consider Your Eventual Tax Bill
When you sell an investment property, you have to pay capital gains tax.
This is something that applies to investments in particular. And it’s much higher than the kind of taxes you would pay if you were selling a home that was simply for personal use.
Before you sell up, you should find out how much the home will sell for and then use a capital gains tax calculator to work out your tax bill. That way, you can be prepared for the financial hit that you’ll have to take before it arrives.
There’s nothing worse than being surprised by a big tax bill that you weren’t expecting or prepared for.
Track Market Prices and Sell at the Right Time
Selling a home means taking a risk. There is always a chance that the property market will pick up, and prices will rise just after you sell.
This risk will always be there, but you can manage it by tracking and monitoring the market in advance of the sale. If things are expected to continue going in a positive direction for sellers, it might be worth holding onto the property for a little longer.
But if the opposite is true, then you might want to cut your losses and sell quickly.
Make it Appealing to the Target Buyer
To achieve a quick sale, you’ll need to make sure that the home appeals to the right people.
For example, if the home is located in a suburban area, it makes sense for it to be decorated in a way that suits families.
Think about who would want to live in the kind of home you’re selling and then target it them with the overall design and layout of the property. People want to be able to walk into the home and see that it can work well for them and their lifestyle.
This is not applicable if you’re selling to another investment, but if you’re selling to private buyers, it certainly is.
Final Thoughts…
If you follow the tips I’ve laid out here you’ll be more likely to get through the selling process a lot more smoothly and possible save yourself some money along the way.
So what are your thoughts, what are you doing to sell your investment property and save a few bucks along the way? Share your thoughts and comments below.
