Thinking about selling your single family rental property? Maybe it’s time to get out of the business or you’re moving equity to a better investment. Here are five helpful tips for selling a single family rental. You may not be able to use every tip, depending on your situation, but they are a good starting point for getting your rental property sold fast and for the best possible price and terms.
1. Conduct A Market Rent Analysis
Confirm the value of the property based on current market conditions. Look at the value as both an investment and as an owner-occupied residence – it could change your selling strategy and there is no way to know if the best offers will be coming from investors or someone buying a home for themselves.
2. Inspect, Repair, Update
Hire qualified inspectors and repair items that need it. When possible, update the property with a fresh coat of paint and replace worn-out systems and appliances (e.g. dishwasher).
3. Bring Rent Up To Market
I see this statement in listings for single family and multi-family rental properties almost every day and it raises a huge red flag:
“Below-market rents, tremendous up-side potential!”
Why are the rents below market? There could be many reasons, most of them aren’t good. Better to raise the rent before offering the property for sale to prove market value rather than asking potential buyers to accept the risk of trying to raise rent later (as a buyer, I’d lower my offer price significantly to mitigate this risk).
4. Gather Your Records
Serious investors are looking at a lot of properties, make it easier for them to buy yours by providing all the information they need to submit an offer in one neat package.
- Offering Memorandum (a summary description of the property, also called “marketing”)
- Rent roll for current tenant that shows all payments and fees going back to first day of lease
- Current lease
- Utility, tax and insurance bills from past 24 months
- Detailed Profit & Loss (Operating) Statement for past 36 months
- If applicable, all legal documents relating to pending litigation or notices of proposed changes to local rental property regulations (e.g. leasing policies, rent control)
- All warranties and maintenance plans covering the structure, systems and appliances (e.g. roof warranty, home warranty policy)
- Inspection reports
- Environmental hazard reports, title report and other disclosures provided by your broker
- Tenant estoppel (form can be provided by your broker)
5. Obtain Tenant Co-Operation
Tenant-occupied properties sell best when tenants co-operate. Provide tenants with incentives to keep the place clean and co-operate with your broker for viewing appointments. Try temporary rent discounts, gift cards or small improvements that add to their enjoyment of the property (while increasing the sale price).
Have questions or need help selling a single family rental property or purchase another one (or multi-family)? Contact Us