Having Trouble Selling an Investment Property? Give These 8 Easy Tips a Try!
Many real estate markets across Canada—especially Quebec and the Maritime Provinces—are showing signs of softening. This is also known as a “buyer’s market.” While it’s a good time to make some property investments, sellers are facing headwinds while trying to offload unwanted investments. A soft market can also make it challenging to both generate income from your investment properties.
A buyer’s market may not be the best time for selling an investment property, but sometimes you don’t have a choice. Even the most sensible investments can end up being less profitable than expected. Or, it may make sense to centralize your investments and consolidate your assets in properties closer to home. Either way, you’ve got a property on your hands you need to get rid of.
Whatever your reason for liquidating an investment, you’ll quickly realize that it’s often much easier to purchase a property than it is selling an investment property. Your ability to offload an asset—particularly a less-than-profitable one—may be challenged by issues including market conditions, the property’s income history and more.
So how do you do it in a market that’s oriented towards buyers, instead of sellers?
Despite your circumstances, there are ways to make the best out of a difficult situation. The key is knowing how to make the most of the positives and downplay the negatives.
But first, if you want to ensure that you have no difficulties selling an investment property that still has a mortgage, click the link below for a free strategy call to discuss how you can minimize and avoid fees and penalties you may risk facing by selling early.
Patience is the key when selling an investment property
If you’re in a hurry to finish selling an investment property, you’ll likely take a significant financial hit. Real estate transactions take a lot of time, especially if you’re trying to recapture the value of your initial investment. Selling an investment property too quickly is never the answer if you can help it.
Remember, you may not always be able to turn a profit by selling an investment property after purchasing. As a general rule, real estate always appreciates. But, micro-conditions in the market may mean your property is currently worth less than it was at the time of purchase. You can improve your chances of moving your investment property and recouping your initial investment (or maybe even profit) if you exercise your real estate savvy.
The key above all else is patience. But that’s not the only thing you need to know.
Discover How To Buy Unlimited Rental Properties With This Step By Step Guide
Highlight economic benefits like cash flow
Regardless of the state of the local market place, there are always going to be economic benefits associated with purchasing a new investment property. You should be able to showcase these benefits when listing your home to prospective buyers. Is there up-and-coming commerce nearby? A new development in the works? Low taxes? Make your case for why the home you no longer want is good for someone else.
Demonstrate the rental property’s value
Whatever your reason for selling an investment property may be, there’s always the reason you bought it in the first place. Tap into this when demonstrating the value that your property could bring to potential buyers. Just because it wasn’t a good investment for you doesn’t mean that they can’t turn a profit off of the property. Play up what made you choose to invest in the first place.
Create an emotional attraction
Even real estate investors base significant financial decisions on emotion as much as on data and acumen. You can use this to your advantage. Try to create an emotional connection between your investment property and its potential buyers. Making a few small touches, like putting furniture in the building, can help the building seem homier and inviting. Appeal to emotion to sway buyers who might be on the fence.
Generate hype
People don’t want to miss out on what they perceive to be a hot investment opportunity, which is why you should work to generate hype around your property. While being a motivated seller has its merit, you shouldn’t appear overly eager to get rid of your property. This can weaken your negotiating standpoint and lower your chances of recapturing your investment. Hype up the property, but have a reason for selling an investment property.
Highlight improvements
To recuperate your initial investment in your property, you have to demonstrate that it didn’t depreciate during your ownership. One way to show you actively invested in the building and added to its value is by showing off all improvements that you made to the property. Show off the new roofing or tout the patio additions you made, or even play up the basic improvements, like new light fixtures, window treatments or kitchen hardware.
Check your appraisal
Market values for property fluctuate regularly. The appraised price of the property you bought a few years ago could be very different than its appraised value today. More importantly, you might have a new benchmark for selling an investment property. Keep in mind the value of your property includes factors like improvements and local-area comp sales. So, be thorough in researching valuation and come to the sales table with a figure you can back up when negotiations begin.
Consider alternative sale methods
While selling your property on the open market is usually the best way to quickly and effectively unload an asset, there are other ways to get rid of undesirable investments. For instance, you could offer existing tenants a lease-to-own option, which would allow them to effectively take responsibility for the property’s management. These options are riskier but do have merit in the right situation.
Bide your time, if you can
Unless you’re forced to sell in a buyers’ market, it might be a good idea to hold your investment until the favour swings in the other direction. Even if you can sell in a buyers’ market, the buyer holds much of the power in the transaction. You might make a sale, but you could end up limping away from it with only a fraction of your investment returned to you.
Exercising patience and demonstrating your business acumen will go a long way when it comes to reaping the best possible return on your investment when liquidating real estate assets. Regardless of your reason for selling off an investment property, prepare for the sale well in advance and work with a trusted realtor to help you maximize your earning potential.
Now, if you want to ensure that you have no difficulties selling an investment property that still has a mortgage, click the link below for a free strategy call to discuss how you can minimize and avoid fees and penalties you may risk facing by selling early.