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You buy rental properties to invest in and then eventually sell and earn capital gains. It can be one of the smartest investments you make in your lifetime. Before you sell, though, there are certain considerations you must make to ensure you handle the transaction right.<\/p>\n
If you own a rental property<\/a>, chances are you have tenants in it. If you decide to sell while you have tenants, you have a big decision to make. How will you sell it? Here are your most common options:<\/p>\n Wait for the Lease to Expire<\/strong><\/p>\n If you have the time, waiting for the lease to expire is the easiest way to sell a rental home. Once the tenants leave, you can fix up the home and sell it as a vacant home. This increases your target audience.<\/p>\n Most buyers looking for a primary residence won\u2019t consider a home with tenants in it. Buyers worry the home won\u2019t be as well cared for as it would if the owners lived in the home. This option works best if you only have a couple of months left on the lease. You can use that time to prepare for the sale, and when the lease ends, you start the process.<\/p>\n It\u2019s a good idea to let your tenants know ahead of time that you won\u2019t renew the lease. While some tenants may move on after lease expiration, some may expect to renew the lease.<\/p>\n Sell the Property to Your Tenant<\/strong><\/p>\n If your tenant loves the property, consider asking him\/her to buy it. You never know if they\u2019d be interested.<\/p>\n In the best-case scenario, the renter wants to buy the home, has a down payment, and qualifies for standard financing. You can conduct the sale as you would with any other buyer, selling the house in a decent amount of time.<\/p>\n If the renter doesn\u2019t qualify for financing and\/or doesn\u2019t have a large down payment, you can offer seller financing. This keeps you involved in the investment, but you\u2019re on your way out. You can provide financing for a few years (you choose the terms). The renter (now buyer) pays you principal plus interest during the term. At the end of the term, the buyer refinances the debt with a loan from a bank and pays you off, releasing you from the investment.<\/p>\n Pay Your Tenant to Leave<\/strong><\/p>\n If your lease has a long time left on it, yet you want to sell now, consider paying your tenant to leave. Many tenants are open to this, especially if you\u2019re willing to negotiate. You can offer any amount or to cover a certain type of expenses, but here are the most common:<\/p>\n Renters don’t have to agree to a buyout, but with the right steps, you may get them to agree so you can sell the home faster.<\/p>\n Sell the Home With Tenants in Place<\/strong><\/p>\n This option has become more popular today. You can sell the property with tenants in it. You sell the home and the lease to the buyer.<\/p>\n This does not affect your renters – they get to stay in the home, and the lease remains unchanged. The only thing that changes is who collects their rent and who they call if\/when something is wrong with the property.<\/p>\n Roofstock<\/a> Marketplace is a platform that brings together investors, both buyers, and sellers, who want to buy or sell property with tenants. It\u2019s the easiest way to sell your investment property with tenants in it. You can sell your home faster than if you had to wait for tenants to vacate, and for the price you want.<\/p>\n Taxes and Selling Rental Property<\/strong><\/p>\n Selling your rental property may put a decent profit in your pocket. That\u2019s the idea of investing in real estate, right?<\/p>\n But, Uncle Sam will have his hand out wanting his share of your profits as it\u2019s income you earned. Before you sell your rental property, understand how it may affect your taxes.<\/p>\n Know Your Capital Gains<\/strong><\/p>\n Capital gains are what the IRS taxes you on when selling a rental property. Capital gains are the difference between the cost basis (purchase price plus any acquisition costs) and the sale price.<\/p>\n First, determine how long you\u2019ve owned the home. If it\u2019s less than one year, you have short-term capital gains and will pay the most taxes. Short-term capital gains are taxed at your regular tax rate and may bump you up until the next tax bracket for higher tax rates.<\/p>\n If you\u2019ve owned the home longer than one year, you\u2019ll pay long-term capital gains rates, which are much lower and range between 0% – 20%.<\/p>\n Fortunately, there are ways to reduce your tax liabilities on an investment property.<\/p>\n Offset It With a Loss<\/strong><\/p>\n If you can time the sale of your investment property with the sale of an asset at a loss, the loss decreases your capital gains. It doesn\u2019t have to be a loss in real estate – it can be a loss in any asset, including stocks, bonds or cryptocurrency.<\/p>\n The key is to sell the asset at a loss in the same year you sell the rental property. The loss offsets the capital gains, decreasing your total tax liability.<\/p>\n Consider a Like-Kind Exchange<\/strong><\/p>\n If you\u2019re selling a rental property because you found another real estate property to invest in, you may be eligible for a like-kind exchange.<\/p>\n You must follow strict rules to qualify, but it can be a great way to defer the taxes you’ll owe on your capital gains.<\/p>\n Here are the basics of qualifying for a like-kind exchange:<\/p>\n No matter the reason you\u2019re selling rental property, Roofstock<\/a> Marketplace can help you get the most money for it and make the process as easy as possible.<\/p>\n Roofstock<\/a> is a marketplace for rental properties. It brings together buyers and sellers, all with a similar goal – to buy or sell investment properties.<\/p>\n You don\u2019t need to handle hundreds of buyers walking through your home. The entire process is done online with the support of Roofstock<\/a> professionals who make the process easy for you.<\/p>\n Benefits of Using Roofstock<\/strong><\/p>\n Working with Roofstock<\/a> puts you in direct contact with buyers looking for investment properties.<\/p>\n Here are some other benefits of using Roofstock<\/a> Marketplace to sell your property:<\/p>\n Selling a rental property can be profitable and easy when you use the proper steps. Roofstock<\/a> Marketplace makes it easy for anyone to sell their rental property with tenants in it.<\/p>\n Look at the big picture before selling your rental home. Know everything that\u2019s at stake and who will be affected by the sale, and you\u2019ll have the greatest outcome selling your investment home.<\/p>\n The post The complete guide to selling rental property in 2022<\/a> appeared first on HousingWire<\/a>.<\/p>\n\n
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Use Roofstock Marketplace to Sell Your Rental Property<\/h2>\n
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