If you own rental property then you might come to the point where you want to sell up. Selling rental property can be done the right way or the wrong way. There are things you can do to make the process much simpler and also times to sell that will be far more beneficial. The lifespan of a property and the taxation on homes means there’s a sweet spot in terms of when to sell.
There are also different ways to sell your property whether you want to sell a house fast or you are happy to wait. In this article, we’re going to look at how to sell a rental property and do so in the way that benefits you.
When to Sell a Rental Property
Everyone’s scenario will be a little bit different. When is it time to sell up? This can depend on the condition of the house and your own scenario. When should you sell up? This may be one of the following situations:
- You need the money for something else. A lot of money can get tied up in property. We all have times in our life when money is required for other things, and selling your property could be a solution.
- You might not be doing as well as you hoped. The rental market can be tough and it might be a lot of work for you, you may not want to persevere with this particular property.
- Upgrading. Maybe you’ve reached a position where you can invest in multiple properties or buy a bigger property if you sell up.
- Relocation. Maybe you don’t live in the area anymore and you are worried about being the landlord in a property you live a long way away from, in case anything happens.
Obviously, the condition of the home can be an issue, too. If you think it is going to be a lot of work for you and a lot of repairs are needed this can take a lot of time and money, and it may not be worthwhile. Ask yourself “shall I sell my rental property? Will it make life simpler? Does it make sense to own the house anymore?”
Just because you own rental property, you might not be an expert or a developer. Selling for cash might just be preferable to making adjustments.
Taxes You Need to Pay When Selling Rental Real Estate
Capital gains tax is a big consideration if you want to sell a rental property. If you sell an asset for more than what you paid for it and spent on it, you can expect the IRS to want their share. 15% of gains is normal if you are a married couple, and your income is between $77,200 and $479k. More than this, you will be charged 20% capital gains tax on sale of rental property if it adds to your income.
The right way to sell might mean a section 1031 exchange. This means that if you sell one property and then buy another property asset, the IRS will class it as a 1031 exchange. This means you can invest the money you have gained without having to pay taxes on it. This is a way to keep the economy growing, so it makes sense for everyone. Do this to make sure you don’t have to pay unnecessary tax, but obviously this can only be an option if you are reinvesting the money.
How to Sell a Rental Property
This can be a big challenge, but this is also how we help homeowners. People come to us saying “I want to sell my rental property fast” and we are able to provide a fast, as-is quote. This means the price we offer takes into account the condition of the home. If you aren’t keen on getting the house up to standard before selling then selling rental property might be your best option.
You can sell in the traditional channels, going through a realtor, open houses and the dreaded property market. This is not a way to sell your house fast, though. In fact, it can take a very long time to sell a rental property. You will also need to make sure you get it up to scratch. This means you may need repairs or to get an evaluation of your property to check it is ready to sell.
Alternatively, you can sell your property for cash. We can give homeowners an option to simply make a sale, not having to worry about property chains or repairs before you go through with the sale. Selling for cash can mean a slightly lower valuation, but freeing up the cash earlier to invest in other things.
