You’ve heard that it takes a village to raise a child. At Beverly-Hanks, we also say that it takes a team to sell your home.
When you hire a Beverly-Hanks agent, you are hiring an entire team of highly experienced real estate professionals. Our agents have an average 10 years of full-service real estate experience. And in that time, they’ve developed relationships with many of the area’s top service professionals.
In our “What can Your Agent Help You With?” series, we’ll break down 15 services that your agent can help you tackle. Today’s topic: Selling a rental.
Your Agent can Help You Sell a Rental Home
So, you own an investment property, but it’s time to move on to other ventures. We get that. And now’s a great time to sell in Western North Carolina. But selling an investment property isn’t the same as selling your primary residence.
When selling a rental property, there are two big things to consider:
- How can you ensure that the property is “parade ready” for buyers?
- How can you keep from taking a financial hit on the sale?
How do you prepare a rental property for the market?
If you have a duplex, a quadplex, or another property with several “units,” it’s likely that the buyer will also want to use it for rentals. But if you’re renting a single-family home, you could have all types of buyers interested in the purchase. After you talk to your renters, you may decide the home needs some repairs or small updates before hitting the market. Either way, you will want to declutter and clean the property. Your real estate agent can help you find reputable service professionals who will do a great job without breaking the bank.
When you’re ready to list the property, your agent can also talk you through how you’ll need to market the listing differently for investors versus home buyers. For instance, if you’re focusing all your efforts on investors, it’s a great idea to let them know that you have existing tenants in place. (Property investors will value an occupied home that has a good cash flow from day one, and tenants get to stay where they are with minimal disruption—win-win!) You may also want to highlight certain features that appeal to renters, letting investors know it’s a good choice for their portfolio. Your agent can help you with that, too.
What’s the deal with capital gains taxes on rental properties?
Capital gains taxes are calculated differently for rental properties compared to primary homes. On investment properties, including rentals, you are responsible for paying capital gains on the income. Here’s how that works:
If the property was used only as rental property, then the capital gains would be calculated on the selling price less the adjusted basis of the property. The adjusted basis is the original cost less the depreciation. A residential rental property is depreciated over a period of 27.5 years on a straight line basis; basically, take the original cost divided by 27.5, and that is the annual depreciation amount.
To minimize the amount you have to pay, you could consider a 1031 exchange. A 1031 real estate exchange is the sale of existing investment real estate property and the replacement of that property with new investment real estate. Certain rules must be followed during 1031 exchanges, and your agent can walk you through what your best options are given your individual exchange.
Do I really need an agent to help me sell my rental home?
It’s easy to do a quick internet search about selling rental properties. But why worry whether you have all your ducks in a row when you can be sure?
Real estate agents are experts in the market and experts in your community. They have contacts in the service industry, in home finance, and among buyers and investors. Sure, you could go into this sale on your own, but wouldn’t you rather have a pro by your side?
Ready to sell your investment property? Ask your agent for help today!
Begin the Plan for Your Rental Home Sale Today!
In any real estate transaction, it takes an expert team to get you where you want to go. When you, your agent, area service professionals, and the entire Beverly-Hanks team work together, you are more likely to sell for top dollar.
That’s why we created the Beverly-Hanks Seller’s Workbook. The Seller’s Workbook uses thoughtful exercises to explain the entire home selling process. It collects information, clarifies your expectations, and coordinates the efforts of you and your agent.