Strategy to sell rental property quickly

[Suddha Talukdar]

I had listed my rental property in Beaverton, OR on Jul 22, 2023. It was my primary home converted to rental about 5 years ago. Plan is to sell and use 1031 exchange and invest in single or multi family in other cash flowing properties. 
I think it was listed at the top end of the market and when interest rates rose in August my agent didn’t react and reduce price. I did the math and ran numbers - using 1031 exchange and the 2x rule, my overall cash flow will be atleast double (since the house is almost paid off). It’s been 2 months now and still not sold- what should I do?

1) use whole seller at a substantial lower price but guaranteed to get cash out quickly

2) rent house again in a one year lease and use a second mortgage to take out equity on the house

3) find a different agent who is willing to be more aggressive to get an offer ASAP

any thoughts or ideas would be appreciated.

Suddha

[Dave Foster]

@Suddha Talukdar, I'd be cautious about #2.  If you use a substantial amount of equity and then later sell it you'll still need to do a 1031 exchange and purchase at least as much as your net sale.  But youll have less equity for your down payment or to purchase.  And the higher the leverage in this time of the cycle higher debt means geometrically higher risk.    But if you've got ample resources this is not a bad plan.

I'm guessing that your listing has become stale.  It was probably way over priced to begin with.  And now the shopping public sees a property over priced and dropping prices.  This is like blood on the water for investors.  It probably doesn't matter as much to a buyer/resident.  So the question is how is it being marketed - as an investment or as a house to call home?  You may want to take the listing completely down for a bit.  Decide whether or not this realtor is right for you.  and then re-list it so it shows as a new listing at a reasonable price marketed to the right demographic.

Unless you've already picked out your next investment and have a time crunch.  You'll be better served taking your time and getting this sale right.