There are many different reasons why you might decide to sell your rental property. You could be tired of being a landlord, you might want to buy a second home, or you might be in dire need of some quick cash. No matter the circumstances, there are a few steps to follow if you decide to go down this road. The good news is that selling a rental property will be much like selling your typical residence – with a few tweaks here and there. You don’t have to struggle to find out what they are, as we are more than happy to share them with you.
What to Do If You Have A Mortgage
In case you have taken out a mortgage in order to buy your rental property, then the first thing you need to do is inform your mortgage provider. You’ll have a couple of options, like transferring the mortgage to a new rental property, opting for a remortgage, or settling it with the proceeds of the sale. Most likely, this decision will depend on your reason for selling the property in the first place. Once you finish this part of the job, the rest of the process still awaits. And it’s going to be quite a ride.
What to Do If You Have Tenants
The ideal scenario would be to sell a rental property that’s currently vacant. However, that is often not the case. So if you have to sell a property that currently has tenants, you need to decide what to do. Your options include:
- Waiting for the lease to expire.
- Paying your tenants to vacate your rental property.
- Selling the property to your tenants if they are interested.
- Selling with tenants in situ.
Bear in mind that selling your rental property with tenants in the house isn’t going to be ideal. You won’t have full access to your property, and there might be issues with the availability of the viewings of the property. That might slow down the process a bit… unless you are selling to another landlord where having paying tenants in place can be a bonus.
Your second option includes giving your tenants notice. Just remember that you need to be fair, and you are obliged to do so both legally and morally. Your tenants are going to need enough time to find a new property, find the right moving company to help them out, and vacate your premises. All of that takes time, so allow them to prepare.
Enlist the Help of a Real Estate Agent When Selling A Rental Property
Keep in mind that hiring a real estate agent when selling a property isn’t a requirement. But it always helps to have someone who knows what they are doing by your side. It would be even better if you could find an agent that specializes in rental property. Just be careful – there are many different real estate agents around, and not all of them will be the right choice. Compare their experience and credibility on the market, take a look at their fees, and make an informed decision.
Get Your Rental Property Ready for Sale
Preparing a property for sale is an essential part of the selling process. However, as opposed to a regular residence that you live in, getting a rental property ready for sale is a bit trickier as you have tenants. Fixing your property for sale means performing any minor repairs, redoing the paint if necessary, and making small tweaks to the property to add curb appeal. It doesn’t matter whether you need to do some major renovation work or are determined to make small changes – you still need to rely on your tenants and their goodwill in the process.
After all, your rental property is still their current home. That’s why you’ll need to ask their permission if you are planning an open house or have a viewing scheduled. It’s precisely due to all of these intricacies that it’s much more challenging to sell a rental property than an ordinary residence.
How to Deal with An Offer
If you did everything right when preparing your property for sale, then the offers will most likely start pouring in. But how do you know which offer to accept? Well, apart from the actual amount on the paper, you’ll also want to check the credibility of the offer. Has your prospective buyer been approved for a mortgage? Are their timescales aligning with yours? If all the pieces of the puzzle seem to fit together, then you have no reason to deny the offer. Of course, it’s possible to receive a few valid offers. In that case, it will just boil down to small things and details. But those are up to you to assess.
Seal the Deal with A Contract
If you have accepted an offer, you most likely feel like all of the work has been done. But the final part of the process is yet to come. You need to agree on the completion date, as well as draw up a contract. Considering the fact that this is a legally binding agreement, it needs to be airtight.
Have a lawyer make a contract that will contain all the important details related to the purchase. Once both of the signatures are on the paper, the contract becomes legally binding. Bear in mind that you’ll have to notify your tenants of the completion date before sealing the deal. Until the moment they move out, they have to be involved in every part of the process.
The Bottom Line
Selling a rental property resembles selling a typical residence with one slight difference – the tenants. You’ll have to consult your tenants for every move you make, as they are the current residents. And, of course, strive to be realistic when setting the price for your property. Overestimating or underestimating the situation has never helped anyone – quite the contrary.
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