We recently wrote an article How To Prepare To Sell Your Baltimore Home: 10 Point Planning Checklist and know that many of you are weighing the pros of cons of keeping vs. selling your rental property.
Many of you are what we call "reluctant landlords." By that, we mean that you reluctantly became a landlord perhaps due to the economy or your personal financial situation. Becoming a landlord made the most sense for you at one time but now, as the market improves, you are wondering whether it is time to sell and get out of the landlord business.
Here are a few things to consider:
Call Your Property Manager!
If you are thinking about selling, either now or in the near future, call or email me. Let me know that selling your rental property is your eventual goal so that we can start to strategize and plan accordingly.
By knowing your end goal, we can closely watch sale values in your community, keep track of lease notice provisions, keep open lines of communication with your tenant, and consider upgrades and repairs that are better for a sale vs. a rental. In between every tenant, we can re-evaluate real estate values, your mortgage balance, and your long term plans to determine when is the right time to sell. By giving us notice, we have time to strategize and plan accordingly and, thus, hopefully reduce your stress level as much as possible.
Call Your Tax Advisor to Discuss Selling Your Rental Property!
This is really important. Selling a rental or investment property has different tax ramifications and you really want to know what to expect from a tax perspective.
- Have you owner occupied the home for 2 of the past 5 years?;
- Have you taken advantage of all deductions and depreciation? (See Rental Property Tax Deductions & Depreciation For First Time Landlords.)
- Are you considering buying another investment property and, thus, doing a 1031 exchange?
- Are you an out-of-state landlord?
Find a good tax advisor as soon as possible and let's get him or her on our team. Sometimes it makes sense to sell sooner rather than later just because of the tax ramifications.
Know Your Investment Property Lease Provisions!
Give us a call so that we can review your lease provisions such as your lease expiration date, when you can put the home on the market, the tenant's responsibilities regarding clean up and access, and how best to coordinate all of these competing interests, dates and timelines.
We know that, in an ideal world, you want to continue to collect rent, have a tenant who accommodates all of your showings, cleans up the home beautifully and looks out for your best interests. That is probably not going to happen. Most tenants will continue to pay the rent but are usually not very excited about having prospective buyers traipse through their home on a daily basis. In addition, the tenant's definition of clean is usually not the same as our definition of "clean." After 17 years of property management experience and many rental/investment properties sold, we know what is realistic. By being realistic, we can shorten your days on market for the property, minimize your vacancy time and help relieve your stress and frustration.
These are just a few things to consider if you are thinking about selling your investment property this year. Go ahead and read our other articles on Selling - for example, What Are The Costs Of Selling A Home In Maryland? and What Is My Home Worth?. Know that we have been in the real estate business for over 22 years and the property management business for 17 years. Though you may have the most experience with Chesapeake Property Management, Inc., we also own Yaffe Real Estate and are here to help you with all of your real estate needs.
