selling a rental home
Selling a rental property by owner is a responsible decision. With a tenant-occupied property, the process is a little complicated. To begin, you’ll want to take a look at the type of lease you have in place and also the terms and conditions mentioned in the rental contract. The other steps then follow. Let us take a look at the basic steps required in selling a rental home.
Notify the mortgage provider – If you have a mortgage on your rental property, it’s important to notify your mortgage provider as early as possible of your intention to sell. You can ask them about the balance amount that needs to be paid and discuss how you intend to pay that. There may be an option to transfer the mortgage over to a new rental property or it can be paid with the proceeds of the sale.
Consider the type of lease with tenants – If your tenants are living under a month-to-month lease, you have to give them a written notice for eviction and wait for the term to end. When your tenants have a fixed term lease and are paying rent and following the lease rules, they have a right to stay through the lease term; that is, unless the lease has an early termination clause. In that case, you would have to wait for the lease to expire. In many cases where the sale of rental home is an absolute must, the owners pay the tenants to vacate. Another option is to find a buyer who’ll purchase your tenant-occupied investment property with a current lease in place. The new owner would allow the tenants to live in the home through the lease period, after which it would be up to the new owner to keep the tenants under a new lease or make other plans.
Hire an estate agent – An estate agent specializing in rental property can guide you about the do’s and don’ts of selling a rental home. They can guide you through the legal procedures which must be considered and make your work easy.
Preparing the property for sale – As with any property sale, you must ensure that the property is ready. In case of rental property, the wear and tear by tenants has to be taken care of before you put up the property for sale in the market. Make sure that the home is de-cluttered and looks presentable. There should be no visible damage and leakages. A fresh coat of paint is a crowd pleaser! So make sure that the buyers are impressed with the home as the first impression can be long lasting.
Hire a Conveyancer – It’s always beneficial if you have a conveyancer to manage the legal process of property transfer from one owner to another. He can guide you to complete the necessary paperwork like filling of Property Information form, Fittings and contents form etc. This would help speed up the process when the offer is finalized.
Accepting the offer and signing the contract – Once you have accepted an offer, the buyer will need to instruct their own Conveyancer, who will carry out all of the legal work associated with the property purchase. The sale contract would be signed, making the contract legally binding. The property ownership would now pass on to the buyer.
Capital Gains tax on rental property sale – If you sell your rental property for a profit, then you may be liable to pay capital gains tax on it. However, you may not owe any taxes at the time of sale if you execute your 1031 deferred exchange properly. A 1031 deferred exchange allows users to defer capital gains taxes if proceeds are reinvested in a new property or portfolio of properties of equal or higher value and loan amounts are either similar or higher. You may consult a tax professional to guide you regarding this.
We at www.sellmyhouseinfo.com make things easy for you at every step. So if you are looking to sell your rental home, feel free to connect with us and we can finish the process in a breeze!
GET MY FREE ESTIMATE:
Feel free to tell us a little about your home and the reason you are looking to sell your home. We will NOT share your info with any other companies.