Selling an investment property isn’t always the same as selling a primary residence.
It’s important to time the sale right, and there are other concerns to think about — like taxes, market conditions and any tenants that may be involved in the process, too.
Are you on the fence about selling a rental property or other real estate investment? Here’s what to consider before you take action.
Market Conditions: Think about rental trends, tenant or buyer demand, property values and the overall costs associated with the local market. Keep in mind that if you have a vacation property, pricing may be highly seasonal, so timing your sale properly will be critical. Reach out so we can look at the data together.
Taxes: Property taxes are often a concern with investment properties, but you should also consider capital gains taxes before you sell, as they could reduce your profits. In some cases, you may be able to defer the taxes with a Section 1031 "like-kind" exchange. Consult a tax professional if this is something you’re thinking of doing.
Tenants and Bookings: If you currently have long-term tenants or short-term guests booked, you’ll need to think about how they will be affected by your sale. You’ll need to give tenants notice, cancel future bookings or make sure to sell to an investor who plans to keep the business running. Talk to a real estate attorney if you’re not sure what your lease or booking contracts dictate.
Improvements and Repairs: Before you decide to sell, make sure you’re prepared (in terms of finances and time) to make necessary fixes and updates. Taking this step could even mean a higher listing price.
Get in touch if you need assistance with your next property sale.
