Brought to you by Scott P. Rogers, Funkhouser Real Estate Group, 540-578-0102, scott@HarrisonburgHousingToday.com
Brought to you by Scott P. Rogers, Funkhouser Real Estate Group, 540-578-0102, scott@HarrisonburgHousingToday.com
Thursday, February 20, 2020
Depending on your short and long term financial goals - you may want to list your rental property for sale for one month between tenants...
In a recent conversation with the owner of a rental property, they were reflecting on the fact that after a tenant recently vacated their rental property (a townhouse) they were making quite a few updates and improvements to the townhouse based on some aging components and finishes in the property. They realized that the townhouse would be in better shape than it had been for years -- and that the condition would likely start to deteriorate (even if just a bit) as soon as they moved tenants back in.
So, they wondered whether they should go ahead and just sell the townhouse instead of renting it again -- since it would be in great shape.
But they lamented the fact that they'd need to keep it off the rental market for several months to see if it would sell at a price that would suit their financial goals - in other words, a sales price whereby it would make more sense for them to sell it than to continue to rent it.
Here are a few thoughts I shared with this owner of an investment property...
- Townhouse values are relatively high right now - higher than they have been in a while. It could be a good time to sell a townhouse rental property.
- Indeed, selling a rental property just after having made improvements -- instead of after tenants have worn the property down again -- can be an excellent idea.
- It is definitely easier to sell a rental property between tenants because an owner occupant or an investor can buy it.
- An owner occupant is likely to pay more for your rental property than an investor would pay -- reinforcing that you'd really want to sell it between tenants, or at the very end of a lease cycle.
- Many to most townhouses have been going under contract quickly of late -- in fact, of the 149 resale townhouses in the City of Harrisonburg that have sold in the past year, 62% of them were under contract within 30 days.
So - here's an idea, if you own an investment property and you are about to have a tenant move out and you are about to make some improvements to the townhouse...
Move the tenant out. Make the improvements. List the townhouse for sale for one month at a price for which you'd be happy to sell instead of continuing to rent the property -- so long as that value is generally in line with recent sales prices for similar townhouses.
With this concept you don't have to commit to listing the property for six months, missing out on rental income, etc. -- but you can quickly determine if you could sell the townhouse while it is at its peak (from a condition perspective) at a price that would make it worthwhile for you to do so.
OK - that was a lot. I'd be happy to talk it all through with you as well - in person, by email, by phone, etc. If you own a rental property and *might* want to sell it soon - be in touch (scott@hhtdy.com or 540-578-0102) and let's talk strategy...
