Being in the real estate investment business involves more than knowing when, where, and how to buy investment properties that will yield a strong ROI. Another important part of it is having a good exit strategy, that is, knowing when and how to liquidate your assets in [market city]. Personal circumstances, business concerns, and market conditions all change over time, or sometimes with rapidity, so you need to know the best way to exit the market if the time comes.
Sometimes we develop an emotional attachment to houses, apartments or other assets we have nurtured over the years. Having a clear understanding for your reasons for holding and your reasons for selling can make the process of letting go and moving on a little bit easier. Selling a rental can be a hassle, but with the right agent on your team, the hard work should mostly be off your plate.
Before you try to liquidate your real estate assets, though, you need to make sure you have several things perfectly in place. So partnering with a top Shoreline agent to liquidate your assets is probably the best way to go about it.
Consider Capital Gains Taxes
Liquidating your assets in Shoreline may well have tax consequences. You’ll have to pay capital gains tax on any profit you make on assets – those that have increased in value and that you sell for more than you paid for them.
You may want to consider a 1031 exchange if you are planning to acquire additional investment properties with the profits of your portfolio sale. On the other hand, if you hold the properties until you die, the tax basis in the property will be reset and your heirs will be able to sell with minimal capital gains liability. If you are holding the property in a self directed retirement account, you may be able to take the gains on a tax free or tax deferred basis.
Several factors go into determining whether or how much capital gains tax you’ll have to pay – for example, the kind of investment property, your investment income, and the amount of the gain. A top agent can help you navigate through all this and determine whether it might be better to hold onto the property.
Prepare the Properties
In addition, before you liquidate your assets in Shoreline, you have to prepare those properties for sale. Otherwise, you won’t get top dollar. If you are selling them with tenants in place, as a packaged portfolio, you may be able to get away with leaving them in as-is condition, assuming that means decent enough for them to pass inspections and be financed.
On the other hand, if the house or apartments you want to sell unoccupied units, you will want to make sure they look their best so you can attract the right buyers. This doesn’t necessarily mean making major renovations, but you will usually have to make all the obviously needed repairs. Still, since the goal is to make money, you don’t want to wind up sinking too much cash into a bunch of repairs that won’t give you any return. And, again, a top agent can provide some objective guidance here.
Get the Sale Price Right
As an experienced investor, you probably already have a good idea of what the sale price should be for each property. Still, it usually takes a top agent to be on top of all the market vagaries that make properly pricing so difficult. Your recent income and expenses, deferred maintenance or recent capital improvements, and rental rate growth, vacancy and proximity to downtown Seattle can all have an impact on your property value. Your agent can conduct a comparative market analysis to find out what similar properties in the area have sold for recently.
A top agent will know what the market can bear and how high is too high. The other side of the pricing coin is that pricing too low can hinder sales as well because potential buyers may think there is something seriously wrong with the property. A top agent can help you avoid either extreme.
Liquidate at the Right Time
An additional piece of the liquidation puzzle that needs to be fitted in is selling at the right time. You may need to liquidate your assets in Shoreline right away, but sometimes waiting can be more profitable. Your personal needs will also have an impact on your plans. If you are ready to simply your life, downsize, and enjoy the fruits of your labor, market conditions may not be the biggest factor to consider.
Obviously, the best time to sell and get the highest return is when a seller’s market is in full swing – that is, when there is more demand for investment properties than there are properties to satisfy that demand. However, that is not the only factor and the good news is that Seattle investment property can sell at any time of year for a good return. And, again, a top agent will be on top of the market, so partnering with one makes eminent sense.
Choose the Right Agent
Partnering with a top Shoreline agent to liquidate your assets means, above all, finding an experienced agent with a proven track record of selling investment properties in your area. When you partner with an agent, you are entering into a reciprocal business relationship, so you will certainly want to have a good fit. Your agent will be working to get you the best deal possible and can do that if she’s a top agent.