Take Your Rentals Off Autopilot and Start Driving

With prices rising quickly, many owners who haven’t been thinking of selling now want to take advantage of the current market conditions while they last. They suddenly decide to sell and want to get that property on the market ASAP.
But wait… what about the renters they put in years ago when it looked like prices would never recover?
You know, those long-term renters who pay every month faithfully, raised their kids who are now in high school there and will have a really hard time finding another rental in the tight market? Or those seasonal renters who have booked the place for the last ten years from November to April and paid a premium while treating the place like it was theirs and adding hot tubs and furniture? Or all those VRBO short termers who come year after year on the same dates and have already booked for next ski season?
What was a steady stream of automatic pilot income is now a problem. Most buyers will want to use the place themselves immediately after closing. And the move-out cleanup and repair will take weeks before the property is ready to show.
And it’s mid July already, the best season for selling is here and this property won’t be showable until maybe September.
Folks, real estate is an investment that demands long-term big picture thinking and planning.
Here’s some tips:
Plan to be on the market not later than June 1 of the year you want to sell.
Give your tenants plenty of notice. Law demands 30 days but in this market that’s just not reasonable for the long termers to find replacement property. Your short term and seasonal tenants should be notified at the end of the season, not the beginning of the next.
Get into the property yourself well in advance of the move-out to make a list of repairs and renovations that need to be made. Last minute work will cost more and won’t be as good as when the contractor has time to schedule his crew and order the things that need to be replaced.
Talk to your tax advisor and get advice about the capital gain you’ll probably be paying so you’re not shocked just before closing… or worse, just after getting under contract.
And don’t neglect the property while it’s rented then try to catch up just before selling. You won’t get $45,000 more when you sell to compensate for the kitchen and bath remodel you finished last week. But renovating two years before will reward you with the highest current price when you finally do sell.
Best advice: always have your property in shape to sell quickly when market conditions dictate.

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