4 steps to Effectively Selling Your Investment Property
Selling investment real estate often includes additional duties and tasks when compared to selling residential real estate, and thus must be approached in a slightly different manner. Here are 4 steps to take when selling your investment property…
1. To Sell or Not to Sell, That is the Question!
When selling a real estate investment, the first step is to determine if it is the right time to sell. The “right time” will actually be dependent on a multitude of factors, namely your personal reason for selling, financial position, and market conditions. You may want to sell your property because you personally manage it and want to buy a different property; you may want to cash in on the appreciation value of the property; you may also want to sell because the property is losing money. Whatever your reason, consider each factor individually when making your decision, and remember that the sale of an investment property can often take weeks if not months to transpire. Be mindful of this time period as it may effect your personal plans and or projected market conditions.
2. Assemble your team.
Investment real estate inherently involves additional criteria and calculations such as cap rates, internal rates of return, and return on investments. Effectively marketing and selling these properties usually benefits from the assistance of industry professionals such as commercial realtors, accountants, lawyers, etc. Consult with, and acquire the services of, as many professionals as needed to get as much information as possible to best market your property.
3. Develop an action plan.
A successfully marketed investment property will contain marketing material that covers as much information buyer’s look for during their “due diligence” period. Work with your real estate team to ensure that this information is present. It will expedite the selling process and increase the chance of a successful sale.
4. Prepare for the taxman.
Disposition of an investment property will undoubtedly be followed by taxation. Both domestic and international tax laws regarding the sale of investment properties are complex, and since it is imperative to know the taxation implications of your sale to properly assess your financial position post-sale, it is recommended to attain professional advice. Check with an accountant or tax lawyer before you sell to make sure you’re aware of the property’s taxation.
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