Are you slowly but surely getting tired of the landlord business? If that’s the case, perhaps it’s time to consider selling your property.
Our team is here to make your entire selling experience stress-free. Cash only, as-is offers, is what we are all about. For us, this is more than a transaction – it’s a way to help you move past your real estate problems once and for all.
So, if you’re keen on selling your rental property hassle-free, keep on reading!
When Is The Best Time To Sell My Rental Real Estate Property?
This is a question that troubles any homeowner. We always say there’s no better time to sell than right now!
That’s the beauty of our business; there’s no need for you to invest either time or money into expensive repairs to increase your property’s value. We don’t care about your rental’s current appearances – we will figure out its after repair value in our process.
It goes without saying that you have to notify your tenants first if you have any. Give them a notice in good time and a final date to vacate the place. There’s always the chance your tenants don’t respect the due date so be prepared to start the eviction process if and when it comes to that.
Tenants are basically the only thing that can stop you from selling your property today.
Can You Sell A Rental Property If You’re Behind On Mortgage Payments?
Let’s say you have a mortgage on your rental property, and lately, you haven’t managed to keep regular payments. Can you sell your home if you’re behind on a mortgage?
Well, yes, you can, as long as the mortgage company hasn’t foreclosed on your home yet. In fact, if it comes to the inevitable foreclosure and your home is close to being sold at an auction, it’s highly recommended that you sell it.
But, there are a few things you need to be aware of. While it may be a good idea to sell your property if you’re behind on the mortgage, it doesn’t mean that your debt will magically go away (if only). That’s not how it works.
Bear in mind this – how much you’ll get out of the sale depends largely on the property’s market value and the amount of your debt. That means all you owe to the mortgage company, including fees, payments, and applicable penalties, will play a huge role in the final purchase price you get for your home.
In a nutshell, there’s no way around the debt you own.
Another thing that determines the price is whether your mortgage is underwater, i.e., if the amount of your debt is larger than the market value of your property. If you’re not underwater yet (but will be soon), it’s the perfect time to sell and pay back the money you owe with the profit you make.
Sell your rental property fast for cash.
Get a cash offer for your rental within 1 day. No obligation, no pressure.
What About the Taxes When Selling a Rental Property?
One thing many rental property owners discover only when they try to sell their properties is that the real estate taxes can add up very quickly. It's inevitable - when selling a real estate property, you have to consider tax implications. Here is what you need to know about tax liability, how to avoid taking a substantial tax hit, and how a rental property sale will affect your tax bill.
Capital Gains Taxes
First of all, you must know that selling a rental property is taxed differently from when you sell your primary property. When you sell your primary residence, your profits aren’t taxable up to a certain point. However, beyond that point, they are treated as capital gains (i.e., capital gains taxes).
When you sell rental real estate property, any profit you make is taxable and you’re liable to short-term or long-term capital gains tax at a certain capital gains tax rate (short-term or long-term capital gain depends on how long you’ve owned the property as a rental, not a primary residence).
For instance, in 2020, the long-term capital gains tax rate was 15% if you’re married filing jointly with taxable income up to $488,850, or 20% if it’s more than that.
You have the option to adjust the basis of your property thus reducing or increasing the capital gains tax. By increasing the basis of your property you reduce the amount of capital gains tax, and vice versa. Increasing the basis generally involves anything that adds value to your property.
Depreciation Recapture
Depreciation recapture is taxed at your regular income tax rate. Homeowners or real estate investors can get depreciation deductions – they are allowed to deduct their contribution on their tax return.
For example, let’s say you held the rental property for five years and wrote $5,000 for depreciation yearly, you’d have to pay the depreciation recapture tax of $25,000 after selling.
While it is deductible, once you withdraw the money, it’s considered taxable income. Another thing important to note is that IRS calculates depreciation recapture based on allowed (or allowable) depreciation. This means you can be subject to depreciation expense even if you’ve never taken depreciation as a write-off.
How To Avoid Paying Taxes When Selling A Rental Property
Knowing how to avoid taxes is something every rental property owner should be familiar with. If you’ve ever been in the game of real estate investing, then you probably know that renting and selling real estate is one of the best revenue streams, but that you can also take a substantial tax hit.
These are some of the most common ways you can avoid taxes when you sell a rental property.
The number one thing to do would be to utilize tax loss harvesting. What is tax loss harvesting, you might ask? It’s something any real estate investor or anyone who’s selling rental properties should know. In short, it means selling a losing investment to generate capital losses. These can then be used to offset any capital gains on your tax return.
Another thing you need to know about is the IRS section 1031 exchange. Property investors and homeowners amid property sales should know when they can use the advantages of this IRS section. Basically, the 1031 exchange allows rental property owners to swap one investment property for another on a tax-deferred basis (the so-called replacement properties).
The IRS section 1031 can only be used on the particular asset class, including business or investment property. Once the initial property has been sold, you have 45 days to identify the swap property. After that, you have to close on your new property within 180 days.
Also, note that any money left over after the swapping is considered taxable income.
Have you considered turning your rental into a primary residence?
The last thing you can try in order to avoid paying capital gains and others is to turn your rental property into a primary residence. The basis of this strategy is the filing status for tax purposes, i.e., if you’re a single filer or married filing jointly. If you sell your primary residence, you can exclude up to 250,000 USD worth of profit (single filer) or 500,000 USD (married filing jointly). For this to be applicable, your property must be your primary residence, not rental.
This is just the basis of what you need to know about taxes. If you opt for selling investment properties or your rental properties, we recommend you talk with a tax professional and get all the intricate details about tax liabilities and everything else related to property sales.
Sell Your Rental Property Without Costs, Repairs, Or Paying Commissions - Quick And Easy
Here’s how we help homeowners sell their rental property fast and pain-free.
A Short Sale Alternative
If you’re dealing with the mess that is negative equity, meaning your rental property’s worth is lower than your mortgage debt, a short sale is (seemingly) your only option.
But there’s a better alternative. If you’ve reached this phase of your mortgage debt, your best bet is to sell your property to a company like ours for cash now. Why?
Let us paint you a picture. The bank agrees to accept less than you owe, they forgive the remaining balance, and they end up losing money in the process. At the same time, you, as a homeowner, are forced to walk away with zero profit from the sale. In the end, no one’s happy, the least of all you.
It’s Quick and Easy
Let’s break down the steps on your way to quick and hassle-free cash:
- You tell us all about your rental property; don’t leave out any of the details, including its current state. Be precise and honest so our team can evaluate it and come up with the best possible purchase price.
- We make you a cash offer based on the information you gave us, completely obligation-free.
- If you accept our offer, we close on the house within days (according to your timetable)
- You receive the money without having to pay any commissions or fees
We Provide As-Is Offers
Many homeowners approach us with concerns that their rental property is not sale-ready, meaning it’s not at its best appearance. Don’t think too much about it, because we buy houses as-is.
This is one of the biggest advantages of selling your house to a company for cash. When you do it through a real estate agent, they will likely see your rental property as a fixer-upper, which inevitably affects the sale, property’s sales price, and the time it spends on the market.
But not us.
Our approach is entirely different because we buy houses as-is. This means that we’re ready to make you an offer no matter the condition of your property.
No Extra Fees or Expenses, No Obligation!
When we make you an offer, you’re not obligated to go with it. All you need to do is mull it over and decide whether you want to accept it or not.
If you do decide to go with it, rest assured you won’t pay any added fees. After all, we’re not real estate agents, so there’s no need to pay any amount for commissions. There’s also a chance we pay for closing costs too!
If You're Ready To Sell Your Rental Property, Call Us Today!
Whatever the reason for your sale of a rental property – whether you’re late on your mortgage payments or you’re not happy with your rental income, don’t waste another second; get in touch now.
You’ll get our offer in 24 hours or less!
Don’t forget we buy houses as-is, so don’t waste precious time or money on redundant expenses. We will offer you a fast and pain-free solution; all you need to do is call us now at (504) 356-8000, tell us all about your rental home, and leave the rest to us.
Get a Fair, No-Obligation Cash Offer for Your Rental Property
If You're Ready To Sell Your Rental Property, Call Us Today!
Whatever the reason for your sale of a rental property – whether you’re late on your mortgage payments or you’re not happy with your rental income, don’t waste another second; get in touch now.
You’ll get our offer in 24 hours or less!
Don’t forget we buy houses as-is, so don’t waste precious time or money on redundant expenses. We will offer you a fast and pain-free solution; all you need to do is call us now at (504) 356-8000, tell us all about your rental home, and leave the rest to us.
