Rental property can be one of your best investments, but sometimes, it might be better to sell it. Right now, real estate demand is outpacing supply, and prices are high. Portland real estate has become very competitive. The median list prices for Portland are over 11 percent higher than last year.
If you have a Portland investment property, it may be smart to cash in on the current market conditions.
A successful investment strategy will include knowing when to sell your property. It all depends on your investment goals and what you want to do with the property in the long term and short term. It might be time for you to sell a rental property that doesn’t fit your investment strategy. You can refinance or upgrade the property if there is still money to be made.
If you are considering whether or not to sell your rental property, or other investment property, in Portland, Oregon, then keep reading to learn more.
When should I sell my investment property?
Do you think it is better to sell your home today or in six months? Perhaps it’s better to sell your house in a few years. It is possible to sell your rental property now, despite the market being very complex right now.
You can cash in your investment today and use the money to make a new investment or get back on your feet. Selling now could allow you to get rid of the title “landlord”. There will be no more late-night alarm calls regarding a furnace or broken pipe. You can cash in on your rental property by selling it. Additionally, you will be able to free up so much time and ease your burden by not having to worry about tenants.
The Portland real estate market is a sellers market
The housing market in Portland right now is definetely a seller’s market. As mentioned before, the median list price for homes in Portland is over 11% higher than last year.
That’s mostly due to the lack of supply. There just aren’t enough houses on the market when compared to the number of buyers. The time to list may be now. The Fed has already begun increasing interest rates.
When interest rates go up, the dollar amount that buyers get approved for goes down. The ultimate effect is that house prices follow that trend and adjust downward. So if you have a house to sell, now is the time to do so.
Assess the location of your investment property
The location plays a major role in how much you can make on your investment. Are you still looking for tenants? Or has the area become less desirable over the past few years? Perhaps there has been a decline in economic growth or disruptions that have made it harder to rent what you want. These are all good reasons to sell your home.
Take note of changes in tenant demand and demographics and analyze the effects of the local economy on rental properties. There might be trends that indicate it is time to sell.
Do I need to repair my rental property before selling?
It is always a good idea to repair a property in order to please a potential buyer. However, you need to be cautious as repairs can often cost more than what the home’s actual value will increase once they’re done.
This is something you should keep in mind as you decide how to sell your rental property.
That being said, if you have had tenants living in the property for a while, you should definitely evaluate the condition of each unit to ensure that it is in at least decent shape.
The property’s curb appeal
Ignoring curb appeal is one of the most common seller mistakes. Some investors may think the curb appeal of a 4-plex or small apartment building doesn’t matter as much as it would for a single-family home
Keep in mind that property investors are people too. They will still have a first impression of the property as soon as they see it. If the outside looks nice, they will assume that the rest of the property was well cared for as well.
What kind of Realtor can help me sell my investment property?
Working with an experienced real estate agent always makes the sale of any property much easier. This is probably even more true for investment properties.
They will list your house for you and be available for the entire selling process. This will come in extremely helpful if you own several rental properties or will continue to invest in the future. Your Realtor will become a member of your team. A member you don’t have to pay unless they do their job and sell the property for you.
A realtor’s commission fees are another thing to consider. Many people do not even know how real estate commissions work, so here we go. Most “traditional” agents charge a whopping 6% fee! This is actually a 3% fee for the buyer’s agent and 3% for your agent. This can add up to a lot of money if the property is valuable. If you are selling a property for $400,000, the total commission could be as high as $24,000!!! That’s 24 thousand dollars out of your pocket. 24 Thousand dollars that you won’t make on your investment property.
Choose a discount realtor
A discount realtor can not only help you sell your house and perform the same services as any other real estate agent, but they do it for a far lower commission. If you’re wondering what is a discount real estate broker, read on.
Before we go any further, I want to reiterate what I just said to make sure it sinks in. A discount real estate broker does all of the same things as any other agent. The only difference is that they do it for less commission.
As an example, Change Realty will set the listing commission at just 1%. That means that even if you keep the buyer’s fee at 3%, you would save $8000 on that $400,000 investment property. And let’s face it, many investment properties in Portland go for much more than that. If you sold a million-dollar rental property, for example, you would save $20,000 by choosing a discount agent.
Steps to selling an investment property in Portland
- Make sure you want to sell your property. Do you want our of the real estate game? Or do you have another play you want to make and need the capital. Will the new investment serve you better in the long run? These are the questions you need to ask yourself before making the final decision to sell.
- Analyze the market in your area. While its always best to sell in a sellers market, you may not have that luxury when it come time to sell. Plus, if you are reinvesting your capital anyway, then it matters less. You will be both selling and buying in the same market.
- Make necessary repairs. You need to decide which repairs, if any need to be made to the property before listing. Make sure to evaluate each decision based on the ROI the repair will bring. Don’t forget about curb appeal.
- Choose a Realtor. Find an experienced real estate agent that can help you do market research, decide on a listing price, and ultimately sell the property for a great price. Don’t forget to consider a discount broker so you can make thousands of dollars more when you sell your investment property!