Complete Guide to Sell Your Rental Property for the maximum amount in

Selling your rental property can be exciting and rewarding. With all the hard work you have put into your investment. Hopefully, you can see a big payday. However, selling your rental property for the maximum amount with the best terms takes a lot of work. Anyone can sell their rental property and get an okay price. But how do you get the maximum price with the best terms? Here are the ten steps to get the highest price with the best terms.

Step 1:

Identify your target buyer. Your target buyer is a buyer who will be able to pay the most amount with the best terms. It is essential that evaluate your property and understand who your target buyer is. This will affect how you word your listings, the type of photos you take, and where and how to run advertisements.

For example, let's say you own a duplex in Lakewood, Ohio, where one unit is vacant, and one is occupied. Because of the Lakewood market, you can get a variety of buyers for this property. A pure buy-and-hold investor, a short-term rental investor, or an owner-occupant. But which buyer will pay the most? In our experience, it has been owner-occupied. This is because they don't view the property exclusively as an investment but as a home. For a house hacker, it may be okay if the property does not have cash flow. Below is a chart that shows the four main types of investment buyers and how to sell to each buyer.

Step 2: Have All the property Information ready and available

You want to give as much information to buyers as possible. Investors will only buy an investment property with the necessary information. Also, the better buyers feel about a property, the more they will pay. To make a buyer feel great about a property, you must give them all the necessary information upfront. If the buyer feels they are prying information from the seller, they may start to think that the seller is trying to hide something. Also, when around all the necessary information upfront, this helps the property sell faster.

When a buyer looks at a listing online, they start to underwrite the deal. Most of the time, they have questions during this underwriting process. And then, they ask the listing agent different questions to help them underwrite the property. All of this takes time. If you can give the buyer all of the information upfront, they can complete their underwriting process faster, which means they can make you an offer faster, and we can close more quickly.

Here is a checklist of everything you need ready and available before you list. Note other than tenant contact information, we recommend including all of this information in your property presentation.

- Rental amounts

- Lease terms

- Who is responsible for what utilities

- If there are utilities the landlord is responsible for, have the two most recent copies of those bills.

- Note when the units have last been updated

- Copy of all active leases

- Tenants contact information

-Age of all Mechanicals

• - Roof
• - Furnaces
• - Hot Water Heater
• - Elecitalca panels

Step 3: Determine a Listing Price

There are a variety of different pricing strategies, and different pricing strategies work better in other markets. With that being said, this is the pricing strategy that has worked best for our clients in this heavy seller's market.

Before you get to this step, make sure that you know your buyer. Who your buyer is will determine how your price your property. Our philosophy has always been you want the market to chase you. You don't want to chase the market.

This means it is better to list lower, create a bidding war to get better offers and bid up the price and terms. Whereas the other way around, if you list the property too high, you can be on the market for too long, and often buyers who would be interested in the listing may not be anymore as they see the property sit and believe something is wrong with it. Or, if you list too high and limit yourself to only one type of buyer, this will hurt your ability to negotiate terms.

For example, let's take a property we recently sold. This property was in Lakewood, Ohio, and was four units. The seller wanted $210,000 for it. So we had two options. List higher at $220,000 to have some negotiation room, or list at $210,000 without space to negotiate. We advise the client to list at $210,00 to attract more buyers and allow us to negotiate better for them. The client listened to our advice, and within 48 hours, we had three offers. One at $180,000 cash (flipper), 10-day closing period, and no inspection. One at $205,000 conventional financing, a 30-day closing period, and a general home inspection (investor buyer). Finally, one at $210,000 conventional financing, a 30-day closing period, and a general home inspection. We were able to tell the two financing offers that we have an offer on the table that is all cash and has no inspections. Sure enough, one of the buyers was able to pay $212,000 and waived their inspection. Because we listed lower, we were able to attract a flipper who gave us an all-cash no inspection offer. We could use that offer as leverage to negotiate the other two offers up. And that is why you want the market to chase you.

Step 4: Writing the Description:

When writing your description, you want to write to your ideal buyer. Refer to the four types of investor buyers above to see how to sell to each type. But here is a checklist of everything you should include in your description

- Note any Highway Access.

- Write if a professional PM company is in the place.

- Cite what the annual appreciation is for that area.

- Cite what the annual rent appreciation is for that area.

- Include that in the description if the tenants have been great and are long-time tenants.

- Know why you are selling and state that reason in the broker remarks "seller is rebalancing portfolio and looking to trade up properties" or "seller is selling to 1031 properties into another deal."

- Note the date/conditions of mechanicals.

- Note the condition of the property (when was the last time the kitchen and bath were updated)

- Write who is responsible for what utilities.

- Write what each lease terms are

- Write what the current gross income is and what the gross potential income is

- State how many units the property is

Step 5: Taking Photos

Most of the time, we recommend hiring a professional photographer to take photos. You can make your property stand out from the rest of the competition for a few hundred dollars. 

Step 6: Determine how Showings will work.

If a unit is tenant occupied, we recommend only doing showings after accepted offers. Over 50% of buyers that will walk through your property are in the beginning stages of their search and are not serious about making an offer. To have nonserious buyers disturb your tenants is not only a hassle for the tenants but a complex process for your listing agent to coordinate. Instead, if the property is fully tenant occupied, only conduct showings after an acceptable offer.

And this is why it is so important to have additional photos and videos for buyers to view. We take pictures and videos of the property and upload them to a dropbox link. Then, put the dropbox link in the broker remarks. That way, any severe buyers can take the time to review all the videos and photos of the property, so they are very aware of the condition.

If the property is vacant, we put a lock box on it and let buyers walk through any time between the hours of 8 AM to 8 PM.