subject: How To Sell Your Rental Property For Top Dollar [print this page] Ways to sell your Rental Property for Top Dollar! If you are a property investor, owning a rental property, chances are that at some point you will want to sell one or more of your houses. This may hold especially true in a hot real estate market, but can also be said for other reasons such as a sudden need for fast cash. Your initial response may be to put the rental property on the market as is, to try and sell it quickly, possibly with the tenant still in the property. Depending on several factors, this may not be the best thing to do. Here is why: Size of your market If you are looking at selling your rental property with the tenant still in it, the most likely buyer for that house will be another investor. I don't know how else to say this, however investors only look to one thing: the profit. By only marketing to the most frugal buyers, chances are you're going to get low-ball offers. On the other hand, buyers looking for their first (or next) home, will usually pay more than an investor. Plus, it's a basic law of marketing: Sell to the largest possible market. This holds true for selling a rental property as well. Property Value Lets say you paid $80,000 for your rental property, house or condo, and are charging $650 per month for rent. These numbers make financial sense to you. However, here we are, 8 years later, and the rental property is now worth $120,000, but the rent increases have not caught up with market value increases (especially in rent-controlled markets). Numbers that worked years ago, may no longer make sense to a new investor, unless he gets rid of the current tenant or increases the rent by 60%. So while you are trying to sell the property to an investor, the fact that there is a low-paying tenant who comes with the deal will actually work against you. Tenants can be disruptive Tenants, especially ones who don't want to leave the property, can be disruptive to the entire sales process. They are only too eager to point out any flaws, real or perceived, in the house to any prospective buyer. I've even had tenants who refused to open the door and allow showings to take place. The best course of action? Remove the current tenants, fix up the home and list it with a real estate agent. Now you will attract not only other investors, but also that home buyer looking for their first home. Opening the sale up to the entire market is the best chance at getting top dollar for your rental property.
