Should I sell my DC rental?

Question

Hi all,

I'm thinking about whether and how to sell my rental in Brightwood. My goal is to cash out, pay off the liabilities and invest in another asset.

Just earlier this year, I jumped through all the hoops, made a bunch of repairs and got a 2 year BBL. The house currently has tenants, most of whom have been around since before Covid.

The options that come to mind are to sell it as a rental with the tenants, or to work with the tenants to vacate the house, do a full renovation and sell to someone who wants to live in it. Any other options I should consider? What route would you go?

Thanks so much!

Caleb Brown · Answer

If you sell it's always best to sell vacant. Easier and it'll sell for more. Once it is vacant you'll have to decide if you should update or sell it "As Is" but base that off comps and the rehab number.

Jules Aton · Answer

Maybe hit up @Russell Brazil there are nuances to each block in city neighborhoods. I would imagine he knows the area and if not could steer you toward a Realtor who does. Having someone who knows the way to get the most bang for your buck in your particular spot would be valuable.

Denise Supplee · Answer

Before deciding, I’d get two opinions: one from an investor friendly agent in your area on what it’s worth with tenants in place, and another on what the true net would be after renovating and selling retail.

Marc Winter · Answer

Another exit plan: 1031 exchange. Follow the rules and save yourself on gains and recapture of depreciation taxes--a BIG savings.

Diana Khan · Answer

@Rachan M., I’ve worked with owners where the biggest question was not actually whether the property would sell for more vacant. It was what had to happen legally before they could get to that point.

With a DC rental and long-term tenants, I would first get very clear on each tenant’s lease status and any notice or purchase rights that may apply before planning around vacancy or renovations. I’ve seen the timeline for the tenants change the whole exit strategy. Once you understand that piece, then you can compare selling occupied, working toward a vacant sale, or even whether a 1031 makes sense for what you want to buy next.

I’m in the DMV and would be glad to stay connected, @Rachan M.. These are the kinds of real estate decisions where planning the exit before taking the first step can save a lot of headaches later.

Should I sell my DC rental?

Should I sell my DC rental?

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