Suggestions needed to sell my rental in Kansas City, MO

[Yippi Jim]

Hello all,

I am consider selling a rental property in KC, MO. The location is not one of the good areas (64130) so it is relatively cheap. I bought it around 85K in 2021. Currently, there is a tenant in the property. 

How is the current market in the Kansas City, MO? Do you recommend that I start the process when the current tenant's lease ends, or when the tenant is still in the property? And do you have recommendations for the agents that I can reach out to?

Thank you

[Lindsey Mannix]

Hi Yippi,

I'd be happy to connect you with an amazing agent in KC if you'd like. Feel free to reach out anytime. As for your question about waiting on the lease to end or listing now, I have a couple of questions back - how much longer is the lease for? If you were to wait until the lease ends, can you afford to carry the costs of the property until sold? What is the need to sell? The answers to those questions would guide the recommendation I would give. Happy to connect!

~ Lindsey

[Milton Chamberlain]

Hi,

I would recommend making it vacant.

Traditional Owner occupant financing requires the buyer to take possession within 60 days. Having the tenant  makes it:

A) harder to show the property, making it harder to sell

B) prevents a majority of owner occupant buyers from being able to offer on the home. So with only a majority of investor buyers, your sold price will be lower.

You can sell it occupied, but if lease ends soon, I would suggest making it vacant, painting interior, cleaning it, etc. this will get you the most money.

I have connections for all those services

This year will be like the last two years. Which means we will start to slow down in late July, and then enter the winter slow season in October.

Assuming rates remain above six percent, I’m guessing the spring market will kick back up in February. Just like the last two years.

Right now we are still in the sellers busy summer market.

You can of course sell from September to February, but there is less buyer demand. So your sold price would likely be less than selling in spring/summer

reach out if you want to discuss more

[Joseph Beatty]

I work with New Western in Pittsburgh, and we have an office in KC that you should get in touch with. Cash offer, quick closing! 

[Yippi Jim]

Quote from @Lindsey Mannix:

Hi Yippi,

I'd be happy to connect you with an amazing agent in KC if you'd like. Feel free to reach out anytime. As for your question about waiting on the lease to end or listing now, I have a couple of questions back - how much longer is the lease for? If you were to wait until the lease ends, can you afford to carry the costs of the property until sold? What is the need to sell? The answers to those questions would guide the recommendation I would give. Happy to connect!

~ Lindsey

Thank you Lindsey! The lease ends in the end of September. I do not have a very urgent need to sell, simply I want to allocate the money to some other assets. Yes, it is not a problem to wait for the lease to end before selling, but I am also concerned that if the market is slow at that time, the vacancy will be too long.

[Yippi Jim]

Quote from @Milton Chamberlain:

Hi,

I would recommend making it vacant.

Traditional Owner occupant financing requires the buyer to take possession within 60 days. Having the tenant  makes it:

A) harder to show the property, making it harder to sell

B) prevents a majority of owner occupant buyers from being able to offer on the home. So with only a majority of investor buyers, your sold price will be lower.

You can sell it occupied, but if lease ends soon, I would suggest making it vacant, painting interior, cleaning it, etc. this will get you the most money.

I have connections for all those services

This year will be like the last two years. Which means we will start to slow down in late July, and then enter the winter slow season in October.

Assuming rates remain above six percent, I’m guessing the spring market will kick back up in February. Just like the last two years.

Right now we are still in the sellers busy summer market.

You can of course sell from September to February, but there is less buyer demand. So your sold price would likely be less than selling in spring/summer

reach out if you want to discuss more

 Thank you Milton! The information about timing is very helpful!. 

[Alex Olson]

What is current rent on the place? What deferred maintenance is there? What sells well in KC is well occupied well maintained properties with great leases in place. 

[Yippi Jim]

Quote from @Alex Olson:

What is current rent on the place? What deferred maintenance is there? What sells well in KC is well occupied well maintained properties with great leases in place. 

 Hi Alex, thank you for the info! The current rent is $950. The property had a rehab and a floor upgrade to LVP last year. Currently, no pending maintenance.

[Lee Ripma]

@Yippi Jim

This area can be sold to either owner-occupants or to investors seeking cash flowing rentals. I don't know the exact location of your rental. A quick look at comps shows that tenant-occupied properties are selling at 65-110k while some sold to owner occupants are selling at up to 200k in this zip code. There is actually great demand in this area so I wouldn't write it off as a bad area at all! The nice thing about selling it as a rental is you can cash flow until close and you won't need to do updates that owner occupants are expecting. I am putting a link to actual comps below so you can see how your property stacks up. With your current rent I'd guess your exit is probably limited to 110k if sold with a tenant in place. If you could get significantly more than that selling it to an owner occupant consider that. 

https://portal.onehome.com/en-US/share/1009945E65373

I hope this helps! 

[Yippi Jim]

Quote from @Lee Ripma:

@Yippi Jim

This area can be sold to either owner-occupants or to investors seeking cash flowing rentals. I don't know the exact location of your rental. A quick look at comps shows that tenant-occupied properties are selling at 65-110k while some sold to owner occupants are selling at up to 200k in this zip code. There is actually great demand in this area so I wouldn't write it off as a bad area at all! The nice thing about selling it as a rental is you can cash flow until close and you won't need to do updates that owner occupants are expecting. I am putting a link to actual comps below so you can see how your property stacks up. With your current rent I'd guess your exit is probably limited to 110k if sold with a tenant in place. If you could get significantly more than that selling it to an owner occupant consider that. 

https://portal.onehome.com/en-US/share/1009945E65373

I hope this helps! 

 Thank you very much!

[Mohammed Rahman]

Hey @Yippi Jim - I recommend starting the selling process once the tenant is out. 

This will make things MUCH easier. I am currently a broker and investor myself, and am planning on selling a few of my properties in the coming year. 

I have it fully tenanted and have provided the tenants a 12 months notice and plan on checking in with them every 3 months to ensure they're on track. To incentivize them, I've provided NO lease break fees if they find something sooner and want to make the jump.