How to Sell Rental Property?
Table Of Contents
• How to Sell Rental Property Florida
• Signs It’s Time to Sell a Rental Property in Florida
• How to Have a Smooth Rental Property Sale in Florida
• Considerations when Selling a Rental Property to Avoid a Tax Hit
➥ 1031 Tax Deferred Exchange on an Investment Property
➥ Living in Your Rental Property Prior to Avoid Capital Gains Tax
➥ Evaluate the Property for Possible Tax-Deductible Repairs or Renovations
➥ Use Tax Harvesting to Offset the Capital Gains Tax
• Selling Rental Property with a Tenant Florida
• Steps in Selling a Rental Property in Florida
How to Sell Rental Property Florida
Do you own rental property in Florida and are looking to sell? If so, you’ll want to read this post. In it, we’ll discuss the best ways to go about selling your rental property and maximizing your profits. So, whether you’re just starting out or are thinking of retiring, read on for tips on how to sell your Florida rental property.
Signs It’s Time to Sell a Rental Property in Florida
Before diving into the tips on how to sell, let’s first discuss when it may be time to sell a rental property in Florida.
Soaring Florida Home Sales Prices
If you’ve owned your rental property for a few years, chances are you’ve seen the soaring prices in Florida‘s residential real estate market. This trend is projected to continue into 2020 and beyond, making now the perfect time to sell.
Florida Housing Demand Vastly Exceeds Supply
In addition to the rising prices, Florida‘s housing market is currently experiencing high demand and low supply. This means that selling your rental property could be a quick and profitable venture.
Changing Local Market Conditions in Florida
As with any market, local conditions in Florida can change over time. If you notice a shift toward lower demand or decreased prices, it may be wise to consider selling your rental property before the market takes a turn for the worse.
The Rental Property Needs Repairs and Upgrades
Owning rental property comes with the responsibility of maintaining and upgrading the property. If your rental property is in need of major repairs or updates, it may be more cost-effective to sell rather than invest in those improvements.
Rental Property is Inherited Property
Inheriting rental property can come with mixed feelings. If you don’t plan on using the property yourself, or if it’s not generating a profit, selling may be the best option.
You Want to Retire from Being a landlord
Being a landlord can be demanding, both mentally and physically. If you’re ready to retire from the role of the landlord or sell off part of your rental property portfolio, it may be time to start thinking about selling in Florida.
How to Have a Smooth Rental Property Sale in Florida
Now that we’ve discussed when it may be time to sell, let’s dive into how to have a smooth rental property sale in Florida.
Know the Type of Buyer You Want to Attract
Before putting your rental property on the market, determine the type of buyer you want to attract. Are you looking for a long-term investor or someone who plans to use the property as a vacation home? Having a clear idea of your target buyer will help in effectively marketing and selling your property.
Arrange a Pre-listing Home Inspection
Make sure to have a pre-listing home inspection done on your rental property. This will alert you to any potential issues that may need to be addressed before listing the property for sale.
Decide If It Is Worthwhile To Do Repairs or Sell As-Is
After the pre-listing inspection, you’ll have a better idea of what repairs may need to be made before selling. It’s up to you to decide if it is worthwhile to make those repairs or if you want to sell the property as-is.
Do a Lien Search
Before putting the property on the market, do a lien search to make sure there are no outstanding debts or judgments against the property. This information should also be disclosed to potential buyers during the sales process.
Inform Your Tenant about Your Intention of Selling the Property
If your rental property is currently being rented out, it’s important to inform the tenant about your intention to sell the property. This gives the tenant time to plan for a potential move and may also make them more inclined to keep the property well-maintained for showings.
Study the Tax Implications of Selling a Rental Property in Florida
Before going through with the sale, it’s important to understand the tax implications. Talk to a financial advisor or accountant to determine how much of your profits will go toward taxes and what steps you can take to minimize those costs.
Depreciation Recapture Tax
In addition to standard income taxes, rental property owners may also have to pay a depreciation recapture tax on the profits from the sale. This is a one-time tax on any previous depreciation deductions that were taken for the property.
Capital Gains Taxes
If the property has increased in value since you purchased it, any profits made from the sale will be subject to capital gains taxes.
Illustrative Example Of Tax Consequences When Selling A Rental Property
To illustrate the tax consequences of selling a rental property, let’s go over an example.
Jane purchased a rental property in Florida for $500,000 five years ago. After making some renovations and renting it out, she decides to sell the property for $750,000.
In this scenario, Jane would have to pay capital gains taxes on the $250,000 profit made from the sale. She may also have to pay depreciation recapture tax on any previous depreciation deductions that were taken for the property.
Considerations when Selling a Rental Property to Avoid a Tax Hit
There are a few considerations to keep in mind when selling a rental property in order to avoid a tax hit.
One option is to do a 1031 exchange, also known as a like-kind exchange. This allows you to defer paying taxes on the profits from the sale by investing those profits into another similar property.
Another option is to sell the property while simultaneously purchasing a new property, known as a simultaneous exchange. This can also defer taxes as long as the sales price of the new property is equal to or greater than the sales price of the old property.
Take Advantage of the 1031 Tax Deferred Exchange on an Investment Property
Selling a rental property can be a big decision, but with the right planning and information, it can also be a profitable one. Our team can help guide you through the process and ensure that you get the best price for your property in a quick and easy sale.
Consider Living in Your Rental Property Prior to Selling to Avoid Capital Gains Tax
If you have been renting out your property for a while and are considering selling, consider living in the property yourself for at least two years before putting it on the market. This can make you eligible for the primary residence capital gains exemption, allowing you to avoid paying taxes on up to $250,000 of profits (or $500,000 if you’re married and filing jointly). Of course, this option may not be feasible for everyone, but it is something to keep in mind when making your decision.
Don’t forget to consult with a financial advisor or accountant to fully understand the tax implications before selling your rental property in Florida.
Evaluate the Property for Possible Tax-Deductible Repairs or Renovations
Before putting your property on the market, consider any repairs or renovations that may increase its value and potentially be tax-deductible. These could include fixing up worn floors or updating outdated kitchen appliances.
Use Tax Harvesting to Offset the Capital Gains Tax
If you do end up having to pay capital gains taxes on the profits from your rental property sale, consider using tax harvesting strategies to offset those taxes. This involves selling investments that have lost value in order to balance out the gains made from selling the property.
Selling Rental Property with a Tenant Florida
If you have a tenant currently renting your property, there are certain laws and considerations to keep in mind when selling.
It is important to inform the tenant of the sale and give them the option to purchase the property themselves before putting it on the market.
You must also follow all necessary eviction procedures if the tenant chooses not to purchase or is unable to do so.
Wait for Your Tenant’s Lease Expiration or Offer a Buyout
If the tenant is currently in a lease agreement, it may be best to wait until their lease expires before putting the property on the market.
If they are not in a lease or if you want to expedite the sale process, you could also offer them a buyout. This involves offering them financial compensation in exchange for agreeing to vacate the property before their lease is up.
Sell Florida Property to Your Existing Tenant
If your tenant expresses interest in purchasing the property, they may qualify for owner-occupant financing which can be a less complicated and faster process than selling to an outside buyer.
Sell Your Rental Property with an Active Lease
If you have a tenant with an active lease, you can still sell the property to an outside buyer but it will require their cooperation.
You will need to inform them of the sale and give them the option to purchase before selling to an outside party. If they choose not to purchase or are unable to do so, you will also need to ensure that the new owner honors the existing lease agreement.
Offer your Tenant to Vacate
Early in Exchange for Compensation
If you have a tenant with an active lease but want to expedite the sale process, you can offer them a buyout as mentioned above. This involves offering them financial compensation in exchange for agreeing to vacate the property before their lease is up.
Steps in Selling a Rental Property in Florida
After you have taken care of any tax-related concerns and your rental property is either vacant or you have come to an agreement with your tenant, selling a rental property in Florida is no different than selling a regular house. You have three primary options for selling a rental property in Florida, which will differ based on the condition of your property.
1. Real Estate Agents
Hiring a real estate agent is often the quickest and easiest option for selling your rental property in Florida. They will handle all of the advertising, showings, and negotiations with potential buyers.
2. FSBO (For Sale by Owner)
If you have experience and knowledge of the real estate market, selling your rental property yourself (known as an FSBO) can save you the commission fees typically paid to an agent. Keep in mind, however, that this route requires significant time and effort on your part.
3. Real Estate Investors
If your rental property needs repairs or has any other factors that may make it harder to sell through traditional means, you could also consider selling to a real estate investor. These investors often purchase properties as-is and can close quickly without the need for repairs or renovations.
No matter which option you choose, be sure to thoroughly research and compare different agents or investors before making a decision. It is also important to carefully review any contracts or agreements before signing.
If you want to save time and energy with a cash buyer like ASAP Cash Offer, we recommend filling up our online form below or calling (805)427-8312. We buy houses in any condition (even ugly ones!) and pay cash (or get you all-cash offers) hassle-free and without high-pressure sales tactics.
Florida Resources To Sell Any Home
We Buy Houses in the cities listed below in Florida Also:
Miami-Dade County
Miami, FL
Hialeah, FL
Miami Gardens, FL
Miami Beach, FL
Homestead, FL
Doral, FL
North Miami, FL
Coral Gables, FL
Cutler Bay, FL
North Miami Beach, FL
Aventura, FL
Miami Lakes, FL
Palm Springs North FL
Palmetto Bay, FL
Hialeah Gardens, FL
Sunny Isles Beach, FL
Sweetwater, FL
Pinecrest, FL
Opa-locka, FL
Key Biscayne, FL
Miami Springs, FL
Florida, FL
South Miami, FL
Miami Shores, FL
Bal Harbour, FL
Surfside, FL
Medley, FL
Wynwood, FL
Little Havana, FL
Westchester, FL
Fontainebleau, FL
Kendall, FL
Kendale Lakes, FL
The Hammocks, FL
South Miami Heights, FL
Country Club, FL
Tamiami, FL
Broward County
Fort Lauderdale, FL
Pembroke Pines, FL
Hollywood, FL
Miramar, FL
Coral Springs, FL
Pompano Beach, FL
Davie, FL
Sunrise, FL
Plantation, FL
Deerfield Beach, FL
Lauderhill, FL
Tamarac, FL
Weston, FL
Margate, FL
Coconut Creek, FL
North Lauderdale, FL
Oakland Park, FL
Hallandale Beach, FL
Lauderdale Lakes, FL
Parkland, FL
Cooper City, FL
Dania Beach, FL
West Park, FL
Wilton Manors, FL
Lighthouse Point, FL
Hillsboro Beach, FL
Lauderdale by the Sea, FL
Southwest Ranches, FL
Broadview Park, FL
Palm Beach County
West Palm Beach, FL
Boca Raton, FL
Boynton Beach, FL
Delray Beach, FL
Wellington, FL
Jupiter, FL
Palm Beach Gardens, FL
Greenacres, FL
Lake Worth Beach (Lake Worth), FL
Royal Palm Beach, FL
Riviera Beach, FL
Palm Springs, FL
Belle Glade, FL
North Palm Beach, FL
Lantana, FL
Atlantis, FL
Canal Point, FL
Haverhill, FL
Highland Beach, FL
Hypoluxo, FL
Juno Beach, FL
Lake Clarke Shores, FL
Lake Park, FL
Loxahatchee, FL
Pahokee, FL
Palm Beach, FL
Palm Beach Shores, FL
South Bay, FL
Tequesta, FL
Ocean Ridge
Hillsborough County
Apollo Beach, FL
Bloomingdale, FL
Brandon, FL
Carrollwood, FL
Cheval, FL
Citrus Park, FL
Egypt Lake-Leto, FL
Fish Hawk, FL
Gibsonton, FL
Keystone, FL
Lake Magdalene, FL
Lutz, FL
Mango, FL
Plant City, FL
Riverview, FL
Ruskin, FL
Tampa, FL
Temple Terrace, FL
Thonotosassa, FL
Town ‘n’ Country, FL
Valrico, FL
Balm, FL
Dover, FL
Lithia, FL
Seffner, FL
Sun City Center, FL
Wimauma, FL
East Lake-Orient Park, FL
Pebble Creek, FL
Progress Village, FL
University, FL
Westchase, FL
Del Rio FL
Greater Carrollwood FL
Lake Fern FL
Turkey Creek FL
Hopewell Gardens FL
Knights FL
Northdale FL
Orange County
Alafaya, FL
Apopka, FL
Azalea Park, FL
Conway, FL
Doctor Phillips, FL
Fairview Shores, FL
Horizon West, FL
Hunters Creek, FL
Lake Butler, FL
Lockhart, FL
Maitland, FL
Meadow Woods, FL
Oak Ridge, FL
Ocoee, FL
Orlando, FL
Pine Castle, FL
Pine Hills, FL
Southchase, FL
Winter Garden, FL
Winter Park, FL
Pinellas County
Belleair, FL
Belleair Beach, FL
Belleair Bluffs, FL
Clearwater, FL
Dunedin, FL
East Lake, FL
Gulfport, FL
Largo, FL
Oldsmar, FL
Palm Harbor, FL
Pinellas Park, FL
Safety Harbor, FL
Seminole, FL
St. Petersburg, FL
Tarpon Springs, FL
West and East Lealman, FL
St Pete Beach fl
South Pasadena FL
Tierra Verde FL
Treasure Island FL
Madeira Beach FL
Redington Shores FL
Bay Pines FL
Kenneth City FL
Lealman FL
Riviera Bay FL
Disston Heights FL
Gandy FL
Feather Sound FL
Indian Shores FL
Indian Rocks Beach FL
Lee County
Bonita Springs, FL
Cape Coral, FL
Cypress Lake, FL
Estero, FL
Fort Myers, FL
Lehigh Acres, FL
North Fort Myers, FL
San Carlos Park, FL
Villas, FL
Polk County
Auburndale, FL
Citrus Ridge, FL
Haines, FL
Highland Park, FL
Lake Wales, FL
Lakeland, FL
Lakeland Highlands, FL
Winter Haven, FL
Gibsonia FL
Socrum FL
Mulberry FL
Bradley Junction FL
Bartow FL
Homeland FL
Fort Meade FL
Polk City FL
Green Pond FL
Lake Alfred FL
Wahneta FL
Loughman FL
Davenport FL
Haines City FL
Dundee FL
Waverly FL
Babson Park FL
Lake Wales FL
Frostproof FL
Lakeshore FL
Indian Lake Estates FL
River Ranch FL
Brevard County
Cape Canaveral, FL
Satellite Beach, FL
Cocoa Beach, FL
Port Saint John, FL
Cocoa, FL
West Melbourne, FL
Rockledge, FL
Merritt Island, FL
Titusville, FL
Melbourne, FL
Palm Bay, FL
Volusia County
Daytona Beach, FL
DeBary, FL
DeLand, FL
Deltona, FL
Edgewater, FL
Holly Hill, FL
New Smyrna Beach, FL
Orange, FL
Ormond Beach, FL
Port Orange, FL
South Daytona, FL
Seminole County
Altamonte Springs, FL
Casselberry, FL
Forest, FL
Goldenrod, FL
Lake Mary, FL
Longwood, FL
Oviedo, FL
Sanford, FL
Wekiwa Springs, FL
Winter Springs, FL
Sarasota County
Fruitville, FL
Gulf Gate Estates, FL
North Port, FL
Sarasota, FL
Sarasota Springs, FL
South Venice, FL
Venice, FL
Manatee County
Bayshore Gardens, FL
Bradenton, FL
South Bradenton, FL
Collier County
Golden Gate, FL
Immokalee, FL
Marco Island, FL
Naples, FL
Osceola County
Buenaventura Lakes, FL
celebration, FL
Kissimmee, FL
Poinciana, FL
Saint Cloud, FL
Marion County
Ocala, FL
Silver Springs, FL
Lake County
Clermont, FL
Eustis, FL
Fruitland Park, FL
Groveland, FL
Lady Lake, FL
Leesburg, FL
Minneola, FL
Mount Dora, FL
Tavares, FL
St. Lucie County
Fort Pierce, FL
Lakewood Park, FL
Port St. Lucie, FL
Escambia County
Bellview, FL
Brent, FL
Cantonment, FL
East Pensacola Heights, FL
Ensley, FL
Ferry Pass, FL
Gonzalez, FL
Myrtle Grove, FL
Pensacola, FL
West Pensacola, FL
Leon County
Alachua County
Gainesville, FL
West Park, FL
St. Johns County
Fruit Cove, FL
Nocatee, FL
Palm Valley, FL
Ponte Verdra Beach, FL
Saint Augustine, FL
Clay County
Flemming Island, FL
Lakeside, FL
Middleburg, FL
Orange Park, FL
Okaloosa County
Crestview, FL
Destin, FL
Fort Walton Beach, FL
Longwood, FL
Niceville, FL
Hernando County
Charlotte County
Port Charlotte, FL
Punta Gorda, FL
Punta Gorda Isles, FL
Bay County
Callaway, FL
Lynn Haven, FL
Panama, FL
Panama City Beach, FL
Upper Grand Lagoon, FL
Santa Rosa County
Navarre, FL
Pace, FL
Milton, FL
Martin County
Hobe Sound, FL
Jensen Beach, FL
Port Salerno, FL
Stuart, FL
Indian River County
Florida Ridge, FL
Sebastian, FL
Vero Beach, FL
Citrus County
Homosassa Springs, FL
Sugarmill Woods, FL
Sumter County
Flagler County
Highlands County
Avon Park, FL
Sebring, FL
Nassau County
Fernandina Beach, FL
Yulee, FL
Monroe County
Key Largo, FL
Key West, FL
Putnam County
Walton County
Mossy Head, FL
Santa Rosa Beach, FL