Rental properties in Augusta are in high demand due to the city's strong economy and desirable location. If you have rental property in Augusta, now might be a great time to sell.
Inventory is low and there is high demand from investors. And when you look at the real estate market stats for Augusta, it's easy to see why:
- Population, median household incomes, and property values are all on the rise in Augusta (Data USA).
- Home values in Augusta have increased by about 80% over the past 5 years, with homeowners taking advantage of the opportunity to sell and turn equity into cash (Zillow).
- Rents in metropolitan Augusta are steadily increasing year over year, a trend that every real estate investor looks for (Zumper).
The real estate market in Augusta currently favors sellers, so it's quite possible you'll receive multiple offers when you list your rental property for sale. However, before you put your property on the market, understand all of the options available if you want a fast sale at a fair price.
Your options for selling rental property in Augusta
Selling a rental property that is currently occupied by a tenant has its advantages and disadvantages, which is one of the reasons some landlords try to get the tenant to move out before the lease is up. Before taking this route, think things through and do your research on 2 key topics:
- Read over your current lease agreement to understand your rights and the tenant’s rights. Some leases allow for early termination with enough notice. In other cases, you may need to pursue eviction if the tenant has violated a lease term—such as paying rent late—and they don't agree to leave voluntarily.
- Become familiar with landlord-tenant laws in Georgia to ensure that you are taking all the necessary legal steps.
The next step is to decide on the best option for selling your rental property in Augusta:
1. Sell to your tenant
Before going through the lengthy process of listing your property on the multiple listing service (MLS), speak with your tenant and see if they’re interested in buying. If they’ve been renting for a while, they just might jump at the opportunity to own their own home.
Some of the best practices to follow when you sell to your tenant include making sure they get preapproved for a mortgage as soon as possible and using the proper real estate purchase and sale agreement in Georgia to ensure that both you and your tenant-buyer are protected.
2. Pay the tenant to leave early
If your tenant isn't interested in purchasing the property, you may be able to convince them to leave before the lease is up by offering a cash-for-keys incentive.
This is where you agree to pay for their moving expenses or help with the security deposit for their new place in order to get the tenant out and have time to make any necessary repairs before listing your vacant property for sale. Offering this incentive could save you time and money in the long run.
3. Wait for the lease to expire
You may need to wait until the lease expires. Of course, you can put your rental property on the market a few months before the lease is up. Always give your tenants proper notice before showings.
One of the risks involved in waiting to sell your property is that the real estate market could slow down while you're waiting for the lease to end. Another risk is that your tenant could damage the property, which would lower its value. That's why it's a good idea to remind them they need to leave the property in good condition when they move out if they want to get all of their security deposit back.
4. Sell with the tenant in place
Selling your rental property in Augusta doesn't have to be difficult. By using an online listing platform like Roofstock, you can sell your property quickly and easily, without having to worry about convincing your tenant to leave.
Some of the benefits of using Roofstock include:
- Collecting rental income right up until the day of closing
- Reaching a global network of qualified investors instead of restricting yourself to the local MLS
- Paying a competitive real estate commission of 3% versus the typical 5% to 6%, with that extra savings dropping straight to your bottom line
Plus, by researching the Roofstock Marketplace, you can see what other properties in Augusta are selling for and make sure you're competitively priced.
What should you do before selling rental property?
Selling your rental property in Augusta can be a quick and profitable process if you take the time to prepare ahead of going to market:
- Gather important documents for potential buyers, such as a copy of the lease, tenant rent roll, financial reports, vendor list, maintenance records, and a summary of any capital repairs or improvements made in recent years.
- Have a professional property inspection done and make repairs as needed so that buyers don't try to lowball your asking price.
- Explain the sale process to your tenants, including showings and how their existing lease and security deposit will be transferred to the new owner.
Finally, don’t forget to calculate your potential capital gains tax liability. If you’re facing a big tax liability, consider using a 1031 tax-deferred exchange to sell your property and buy a replacement investment property without having to pay the tax immediately.
How to price your investment property for sale in Augusta
Of course, you want to have a competitive asking price per square foot. But it's also important to be aware of key metrics that potential buyers of rental property will be interested in. These include the cap rate, cash-on-cash return, and after repair value (ARV):
- Cap rate is calculated by dividing the net operating income (NOI) by the asking price. This ratio can then be compared to similar properties for sale in your area to make sure you're competitively priced.
- Cash-on-cash return shows how much money the down payment will generate when the purchase is financed at today's interest rates.
- ARV is important to determine if you can't afford to make all of the needed repairs. This will help buyers understand the instant equity they'll receive once all of the maintenance is done.
Using these key metrics will help you sell your rental property in Augusta quickly and at a great price. Get a free price estimate and consultation.