Selling real estate properties, such as rentals, is a comprehensive process. However, there are real estate agents who provide buyers and sellers with an easy platform and process to achieve this goal. The downside of this arrangement, though, concerns the scrutiny associated with having a public listing of the property. Another aspect to consider is that involving agents to market your rental property takes away control, aside from being a costly option. Some clients also prefer to keep off third parties or unnecessary public scrutiny.
In this day and age, there are alternatives to this process. Privacy can be achieved by utilizing available networks and other platforms to reach buyers. To discover new tricks to this trade, here are some tips to consider when selling without listing:
Prepare the Rental Property for Sale
Just like any other building, rental properties undergo depreciation. The process of wooing buyers or companies that buy houses is anchored on having a good visual appeal and presenting the property under good condition.
The following are some of the areas you can work on:
Drainage system – Tenants value having a working drainage system. Prospective buyers can also be turned off by the need to make those repairs themselves. Liaise with a plumber to identify ducts that need replacements, existing blocked pipes, and any other drainage defects. You can also use the recommendation and complaints of tenants to solve the drainage issues.
Conduct a paint job – A building’s paint job deteriorates over time; walls develop flakes, paint jobs fade, and sometimes paint peels off due to harsh weather or environmental conditions. It’s advisable to put a fresh layer of paint on walls, windows, doors, interiors, and any exterior parts that may need a fresh look.
Floor solutions – Rental properties with cracked tiles, protruding nails, or missing floor parts have little appeal and bargaining power to clients. You can use better solutions like installing linoleum floors, vinyl floors, laminated floors, or engineered hardwood floors. If your budget permits, perform a total makeover of the building floor solutions.
Other repairs – The value of a building can be affected by defects found on items like doors, roofing, security lights, or a weak electrical system. Consult a building contractor to diagnose any problem and provide ways to solve them.
Set a Price for Your Property
The price you allocate for a property can determine the speed at which the property is bought. A seller should always take into account the opportunity cost of the rental income. Therefore, the price should factor the anticipated rental income.
You can hire a real estate expert or a valuer to assess the price of the building. This process takes into consideration several aspects such as bills of quantity, market value, surrounding developments, and additions or alterations made to the building. However, remember that real estate agents use their network of professionals to assess the value of buildings. Thus, this process is included as a portion of the total commission.
An alternative is to inquire from a network of property owners to get more information about market prices. Friends who have recently sold their rental properties can also give you hints on prevailing market prices.
Utilize Available Platforms
There are plenty of options that sellers can explore to bypass agents and avoid prohibitive commissions. The key to success in this area is proper preparation, using quality photographs, and setting reasonable prices.
Some of these platforms include:
Cash buyers – Cash buyers, are companies that acquire properties in an ‘as is condition’ for reselling later on. They can offer an excellent opportunity if the offer is good enough, in the process, avoiding the involvement of many parties.
Social media platforms – A good percentage of people look for solutions and products on social media. Social media sites have platforms like groups, page insights, and analytical tools that can improve your success when looking for a buyer. Search for opportunities like real estate groups, hashtags on Twitter, and Facebook or Instagram stories to present your rental property to prospective buyers.
Pay-per-click (PPC) campaigns – Search engines, and social media sites have existing programs for placing ads that are payable whenever people click on them. You can tap into the significant traffic these sites attract by placing ads targeted to a specific audience. This method is cost-effective and more convenient.
Friends and family – Your friends circulate within different professional industries, and their respective networks can be a potential source of buyers. Ask for referrals, recommendations to other people, and suggestions for investors as you search for buyers within their circles.
Arrange For A Viewing
One of the unique challenges you will deal with is the presence of existing tenants. It’s financially prudent to look for a buyer when there are still tenants in the building. The buyer will then acquire hard evidence of the earning potential of the property. Remember that you will not lose income if the selling process is delayed for various reasons.
As a viable solution, talk to your property managers and a few tenants to allow potential buyers to view the property. Ensure to give each prospective buyer ample time to view the property privately. This stage should only be offered to buyers who have displayed some level of commitment.
Liaise With Legal And Tax Advisors
After settling for a price, it’s crucial to involve a lawyer to handle the transaction. Having a lawyer’s presence offers legal validity to the sale agreement. The lawyer also generates a contract document that binds the buyer and the seller. This document is enforceable in a court of law in case of any dispute or default of the terms and conditions.
You also need to involve a tax advisor to identify any capital gains tax that needs to be paid. The advisor can give further recommendations on how to handle tax matters regarding the sale of the property.
Selling rental properties through listing agents can take a chunk of your proceeds due to the high value of the properties. This challenge can be bypassed by preparing your property well to sell on other channels and platforms.
The success of this option depends on how well you can execute it. In short, if you heed the tips presented above, you can also do the selling on your own—and be successful at it.