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4 Ways To Sell Your Investment Property
What are the different ways to exit your rental property?
Now a lot of times when people buy a rental property, they don’t really think about how they’re going to exit the property. Even if you don’t plan to exit it, you always want to purchase it with that in mind. It’s like creating a business. You always want to create a business with the plan to how you’re going to sell that business one day, and you want to build it to sell it. Same thing goes with the rental property.
Selling it on the MLS
The first way is the standard way, is by selling it on the MLS (Multiple Listing Service). Normally that’s going to be your best option for getting top-dollar for your property. The only challenge is that if you are currently using it as a rental property, you need to vacate the tenant. You may also need to do some upgrades to the property, and there’s gonna be some holding time while the property is listed for sale. Pricing it competitively is important.
Sell to another investor
Selling it on the MLS to another investor is another possibility. Normally they are going to be looking for a discounted price. However, on the plus side you can usually sell it with a tenant in place. If you’re going to choose this route, I recommend that you make sure you have all the rental applications and leases current are up-to-date and the tenant is up to date on paying rent. If all this is good, you should be able to sell the property based on that information. Some investors may be out of state or out of country and more apt to purchase the property because it has immediate cash flow.
Sale by owner
Some investors choose to sell the property themselves and don’t want to have an agent involved in the transaction. You can sell the property by yourself but make sure you know what the current laws are, any disclosures and other important aspects of selling. Sometimes you can list it on the MLS for a flat fee. You want to make sure that you protect your time and you know what you’re doing. A lot of times, people will get involved in trying to do a first sale by owner only to realize they’re wasting their time because they’re not exactly sure how to do it, and they’re not sure how to vet the potential buyers.
Selling it through owner financing
I’ve personally done this with rental properties, and it’s a great strategy. I owner-financed it to an investor, not to an end-buyer. There are a lot of investors out there who cannot get a regular loan. Maybe they have too many properties, and they are willing to pay a higher interest rate. They are willing to do an owner-financing with 20-25% down, and you can sell the property that way on an owner-financed note, where you may do a 20-year note with a 3-year balloon, meaning they pay the property off in 3 years but it’s amortized on a 20-year schedule.
There are many different ways to sell your investment property. The nice thing about owning real estate is that there’s not just one way to do it. There are multiple ways – probably 20-30 ways that you can exit a property. We only discussed 4 of them.
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