How to Sell Your Rental Property While Keeping More Money in Your Pocket
Selling a home costs a lot of money – sometimes as much as 10% – 15% of the sales price, especially if you use a real estate agent. When you’re selling a rental property, the last thing you want to do is give up as much as 15% of your profits, but how do you keep more money in your pocket?
With careful planning and using the right tools, you can keep more money in your pocket and walk away a happy investor.
Reasons to Sell Your Rental Property
Buying and selling homes happens every day, but deciding to sell rental property is a big decision. You likely invested in the property with the hope of supplementing your retirement or setting up your estate. So why would anyone consider selling their rental property?
Here are a few reasons.
Rents Aren’t as High as They Used to Be
If you invested in the property when the market was hot, but things have simmered down since then, you may not find the investment worth it anymore. Whether you sell the property and pocket the cash or reinvest it in another property, doing a like-kind exchange, you may have a better use for the funds.
If you’ve noticed rents falling, you may want to get out while property values are still high enough. As rent prices fall, values typically follow suit not long after, so getting out while you can still make a decent profit may be on your radar.
The Rental Market Dried Up
Just like rental prices fall, the rental market itself may dry up in certain areas. What was once an up-and-coming rental market may not be an area where people have grown to prefer homeownership.
If the rental market isn’t what it used to be in that area, you may find your home vacant more often than you prefer. Vacancies leave you without monthly cash flow and actually hurt your income since you still have to cover the carrying costs of owning the property.
You Want to Try a Different Market
Some investors just want to try something new. Maybe you bought a starter home – a home that accommodates new couples or young families, but now you’re ready to move onto more expensive homes with larger profits.
If you can’t afford to keep both homes, you may consider selling your current investment so you can afford the bigger or more valuable home in another area.
You Don’t Want a Real Estate Investment Any Longer
Real estate investing isn’t for everyone. If you tried it and decided it’s not for you, it’s easy to get out. You’ll need to sell the property, timing it right and ensuring that you walk away with as much money in your pocket as possible, though.
How to Sell a Rental Property
First, you have to decide how you’d sell your rental property. You have a few options:
Selling a Vacant Home
Most investors sell their property once the current lease expires. They fix up the home and list it without interrupting the tenants. This method takes more time because you must wait until the lease expires, which could be a few weeks to many months.
Selling an Occupied Home
You sell primary residences while you still live in it, so it makes sense that you’d sell a rental property with tenants too, but it gets complicated.
Not only do you have to make sure the home is in great condition, but you have to work around the tenant’s schedule. You rely on them to make the home accessible, keep it clean, and not jeopardize the potential sale.
Selling a Turnkey Property (a Home With Tenants)
One way to sell a property with tenants and not feel as if you’re bothering them. When you sell a turnkey property, you sell to investors who want to buy a home with tenants in it already.
This does a few things:
- Keeps your tenants happy because they don’t have to be interrupted in their own home
- Allows you to list the property at any point during the lease period
- May allow you to make more money on the home
Methods to Use When Selling a Rental Property
Once you decide to sell your rental property and choose how you’ll do it (vacant, currently occupied, or with tenants), you’ll need to select a method to sell it.
Selling With a Real Estate Agent
Most people know you can sell a home with a real estate agent. When you use an agent to sell your home, you’ll pay the real estate commission. On average, real estate agents charge 5% – 6% of the sales price or $5,000 – $6,000 for every $100,000 in sales price.
Real estate agents do all the work. They take the pictures, list the home, communicate with potential buyers, handle negotiations, and walk you through the closing process. They earn their money, but it’s a hefty price to pay, leaving you with much lower profits.
Selling by Owner
You can sell your rental property by owner and save the 5% – 6% sales commissions, but then all the work the real estate agent does falls on your shoulders. This includes listing the home, dealing with buyers, handling negotiations, and marketing the home.
When you sell a rental property, you have a limited target audience. Unless you wait until the home is entirely vacant, you fix it up and then sell it, you’ll likely only have real estate investors interested in the house. If you don’t know how to target this audience, your home could sit unsold for a long time.
Selling With Roofstock Marketplace
If you want to sell your rental property while your tenants have an active lease on the property, you’re selling a turnkey property or a property with tenants. This limits your audience even further if you’re selling on your own or even with a real estate agent.
Instead, using a platform that brings together real estate investors, both buyers, and sellers, you’ll have a much larger audience. Roofstock Marketplace is this platform. You can sell your property on Roofstock for half the cost of selling it with a real estate agent, but get many more tailored services for real estate investors selling rental property like yourself.
How Roofstock Marketplace Works
Roofstock Marketplace is the number one way to sell turnkey properties (properties with tenants). Here’s how it works.
1. Everything Is Done Online
When you list your home with Roofstock Marketplace, they handle everything digitally. You never have to leave your home, and you can have a listing up and running in a short amount of time.
You’ll communicate with Roofstock by providing details about your property, offering as much as possible. You’ll also provide as many pictures of the property as possible. Roofstock professionals use this information to estimate how much you could list your home for, which helps you decide if now is the right time to sell.
2. Roofstock Does the Due Diligence
A big part of selling a rental home is proving its worth and ensuring it’s in good condition. Roofstock does all of this and more for you, providing potential buyers with all the information they need to make a decision.
Roofstock professionals conduct an inspection to determine the home’s condition. This is the only time you’d have to disrupt your tenants as the rest is done digitally. Roofstock professionals also research the title history to ensure the home doesn’t have any outstanding liens except any financing you have on it.
Roofstock evaluates the rent, the rental market, and the operating costs to provide potential investors with as much information as possible to decide.
3. A Listing Is Created
Once all the back-end work is complete, Roofstock creates a listing that they market to their community of hundreds of thousands of investors who use the platform. Roofstock provides all the information investors need to feel comfortable buying a home sight unseen in the listing.
The listing includes documents, analyses, and information about the current lease to determine if it’s a good fit for their intended goals.
4. Handle Offers Online
All offers go through the Roofstock platform. Just like when you sell a home yourself or with a real estate agent, you and the buyer can negotiate the price and terms of the sale.
Once you agree on a sales price and terms, you’ll execute a sales contract and move through the closing process with Roofstock’s support. The process usually takes around 30 days to complete after you sign a contract.
Reasons Sellers Should Use Roofstock Marketplace
One big reason investors use Roofstock Marketplace to sell their home is to keep more money in their pocket.
As discussed above, real estate agents are expensive, which depletes your profits when selling a rental home. When you use Roofstock Marketplace, you save a lot of money. Roofstock charges sellers just 2.5% of the sales price or $2,500 per $100,000 versus $5,000 – $6,000 in fees.
Since the number one reason to invest in real estate is to make a profit, it makes sense why thousands of investors are using Roofstock Marketplace to sell their homes. But sometimes money isn’t the only reason. Here are a few more.
Roofstock Does All the Work
Selling a home is a lot of work, but when you use Roofstock, they do it all for you. All you have to do is provide them with the information about the home and take great pictures – Roofstock does the rest.
With the lower fees they charge and the incredible amount of work, it’s a great deal for investors who want to maximize their profits.
You’ll Have a Larger Audience
When you sell an investment property with tenants in it, you shrink your target audience significantly. If you try to do it on your own, it may take many months to find the right investor only because you don’t know where to market it.
Roofstock Marketplace is a platform for investors looking for turnkey properties. You won’t have to weed through other buyers who want a primary residence or investors who want to fix and flip the home – you’ll target the right audience and sell your home faster.
Roofstock Professionals Have Experience
When you’re selling an investment property, you want someone who has experience. A real estate agent may know how to sell homes in the area, but if he/she doesn’t specialize in rental properties, you won’t market your home in the right areas, leaving you with less money in your pocket or, worse yet, an unsold home.
Let Roofstock Help You Sell Your Property and Keep More Money in Your Pocket
If you’re selling an investment property, you need the right help. Roofstock Marketplace offers the expertise, services, and low fees you need to keep more money in your pocket when selling your rental property.
If you want to keep your tenants in the home but want to get out of the investment now, consider using Roofstock to reach the right audience and find your tenants a new landlord.