Being a landlord isn’t always an easy task, but owning a property and having others pay the rent is often worth the hassle for the long-term financial benefits. If you’re lucky enough to have conscientious tenants, it may even seem like a no-brainer. There are times, however, when you may just get fed up with the entire process. Maybe you have nightmare tenants, or the cost of repairs and maintenance on the property are just too high, or maybe the steep increase in rents is making it hard to fill vacancies—these challenges are enough to frustrate anyone.
It’s no secret that the San Diego real estate market is a bona fide gold mine for real estate investors. San Diego ranked as the 6th-hottest real estate market in February of this year, and property values continue to rise, approaching levels that could eventually reach the high points we experienced in 2005-2006. That’s great news for investors, but some experts think that it’s bad news for income property owners, as the high cost of renting a home stands to turn thousands of families away from the San Diego area. If you are currently renting out your property, this may not bode well.
Of course, every landlord’s biggest challenge is keeping their property occupied full-time, as a high vacancy factor is not an investor’s friend. In light of the data that suggests a likely market slowdown, some property owners may want to take advantage of the high market by quickly cashing in on their investments.
Challenges for the Investment Property Landlord
If you’ve owned an income property in San Diego for the last few years, you know how high the market is right now. In September, the average apartment rent was a whopping $2,123. One bedroom apartments are renting for $1,779 per month, with two bedroom apartment rents averaging $2,253. As with all cities, some neighborhoods are more expensive than others (La Jolla, Little Italy, and North City), while some offer renters comparatively cheaper digs (Paradise Hills, City Heights East, and Darnall). Nonetheless, all owners of San Diego income properties stand to benefit from selling during this market high—regardless of the neighborhood they’re in.
All of that is fine and well, but as anyone who’s ever been a landlord knows, selling rental properties isn’t always a cakewalk. Here are some factors you’ll want to consider:
- The property may be occupied. It’s a rental, so it’s likely that it has a tenant in place. Some occupants may not cooperate with showing the inside of their residence, and that can make selling the place difficult. Make sure you know your tenant’s lease terms (a 24-hour notice of entry clause is pretty standard) and that you talk to them openly about your plans for the property, as open communication can mean the difference between a tenant who makes showing the property easy, and one who makes it hard.
- There could be a long-term lease in place. If you wrote the lease, you’ll likely know whether you included a clause that stipulates what happens if you sell the property. If you didn’t write it, you’ll want to take a closer look at those lease terms. Depending on what’s written in the lease, you’ll either be able to ask your tenants to vacate (with 30-days notice) upon the property’s sale, or the property’s new owners will have to honor the rest of that lease.
- You might be renting to a tricky tenant. Has your tenant made their past payments on time? Have they abided by the rules and regulations associated with the property? If not, it might make more sense to wait until their lease is up. While there are laws in place to protect both landlords and tenants in these situations, the legal process is long and costly, and many landlords just don’t have the bandwidth for it.
- Deferred maintenance. Has the property suffered from deferred maintenance and repairs over the years? If your property hasn’t been well maintained, it may need extensive repairs in order to be a competitive choice for investors. Your other option is to sell it as-is, but because it needs work, you may not be selling it for top dollar.
If you’re facing any of the above challenges as a landlord wanting to sell your investment, there are a number of options available to you:
- You may choose to bring the property up to pristine condition and have any deferred maintenance and repairs on the property completed by yourself or professionals. This, of course, can be an overwhelming undertaking, especially for an owner residing out of the area.
- You might also choose to wait until your current tenant’s lease is up for ease in selling. If your tenant’s payment history is spotty, the lease agreement is not favorable for some reason, or you’re faced with a “nightmare tenant,” waiting until the end of their lease could make it a lot easier for you.
- You may opt to get your property ready for sale either by doing it yourself (FSBO), using a real estate agent that is hopefully experienced in the sale of rental listings, or selling direct to another investor such as Sell Your House Direct.
- If your property is collecting high rents, you just might reconsider and choose to ride it out and enjoy the cash flow you are experiencing from the marketplace.
Whatever your selling options, unexpected issues come up for even the most experienced landlords. If that’s the case for you, and you find yourself wanting to liquidate your income property, selling it quickly and easily may be your best option. Sell Your House Direct offers fast and easy sales to homeowners who want to unload their properties, and we’re more than happy to offer insight on tough landlord situations for those who need it. We’d love to help in any way we can, so connect with us today to learn more about how we can help sell your property and put cash in your pocket.Views: 9