When it comes to investment properties, it can be hard to know when to sell. Sometimes people are forced to sell their investment property due to financial difficulties or unforeseen circumstances, and sometimes it’s just a choice. If you find yourself in a situation wondering whether you should sell or not, there are five factors you should consider before you put that “for sale” sign up.
What is the current real estate market like?
We all know the real estate market has its highs and lows. Just because you’re ready to sell now doesn’t mean it’s the best time to do so. One big thing to consider is whether it’s currently a buyer or seller’s market when you’re ready to sell. If it’s a buyer’s market that could mean you won’t get what you were hoping to get for the house.
If it happens to be a seller’s market you could run into problems if you’re trying to sell a property that is occupied. The new owner will have to take on some costs and that could affect your bottom line.
What does the competition look like?
You need to know the competition before putting your rental on the market. What have comparable home sold for recently? What are they selling for right now? You need to know what you’re up against and what the going rate has been to get an idea of what you may be able to sell your rental for. Just be sure you’re comparing apples with apples. Don’t compare a house that has twice the square footage just because it’s on the market. Look at all the characteristics of your rental and find ones that are similar in more ways than one.
Can I increase the value before I sell?
Naturally you want to get as much as you can for your rental home. Look around and see what little things can be done to boost the value and in turn make you more money. Some things to look into include a fresh coat of paint (that always makes things look new), new light fixtures, flooring (sometimes even just getting them professionally clean can really spruce things up). All of these things can really add to your property value, not to mention the fact that they will make your home look more updated and maintained.
Do I have curb appeal?
Although the saying goes, “you can’t judge a book by its cover”, many people do judge a home by the way it looks on the outside. If your grass is overgrown and there is peeling paint on the house, potential buyers might pass your home by. Keeping the lawn cut and the exterior of the house in top shape will attract buyers. Other potential investors will like the fact that the house looks well-kept while potential resident buyers will appreciate the fact that there is less work from them to do. You can never go wrong with top-notch curb appeal.
Am I willing to negotiate and if so, where and to what degree?
Even before you put your house on the market you need to know what you would accept as an offer and what would be completely off the table. What is the number you are willing to work with a potential buyer? Knowing all of these things ahead of time will make the selling process that much easier. Present yourself with enough scenarios to know where you stand. For many sellers the issue of how badly they need to sell and their timetable are key factors when determining their acceptable bid range.