How to successfully sell your rental property in Houston

If you're looking to sell your rental property in Houston, now is a great time. There is high demand from investors and relatively low inventory, with all the markings of a seller's market:

  • Population, employment, median household incomes, and property values are all on the rise in Houston (Data USA).
  • Home values in Houston have increased by more than 56% over the last 5 years, with sellers seizing the opportunity to turn equity into cash (Zillow).
  • Rents in Houston are increasing over the year, which is news that real estate investors love to hear (Zumper).

However, before you put your property on the market, it's critical to understand the options for selling a rental home in Houston if you want a quick sale at an attractive price.


Your options for selling rental property in Houston

Selling a rental property while it is still occupied by a tenant has its advantages and disadvantages, which is why some landlords try to get the tenant to leave before the lease expires. Before taking any action, think things through and research 2 key areas:

  1. Understand your current lease agreement and landlord and tenant rights. Some leases allow for early termination with proper notice given. In other cases, you may need to pursue eviction if the tenant has violated a term in the lease—such as by being late on rent payments—and they don’t agree to leave voluntarily.
  2. Take the proper legal steps in line with landlord-tenant laws in Texas


Houston suburbs

The next step is choosing your best option for selling

1. Sell to your tenant

Selling to your tenant is often the easiest way, as you won't have to go through the hassle of listing on the multiple listing service (MLS). Just be sure that they get preapproved for a mortgage and that you use the right real estate contract.

2. Pay the tenant to leave early

If your tenant isn't interested in buying, you may be able to convince them to leave early by offering a cash-for-keys incentive, such as helping with their moving expenses or the security deposit on their new place. This will give you time to make needed repairs before listing your property for sale.

3. Wait for the lease to expire

If you're willing to wait, you can simply let the lease expire. Always give your tenant proper notice before showings and remind them that they need to leave the property in good condition if they want their security deposit back.

4. Sell with the tenant in place

Roofstock is a popular option for property sellers in Houston. It's simple to market your house if you have a renter, and you can save time and money by not trying to persuade the tenant to leave:

  • Sell with a tenant in place and keep collecting rental income until the day your deal closes.
  • Reach a global network of qualified real estate investors and pay a competitive commission (3% instead of the typical 5% to 6%).
  • Check out the Roofstock Marketplace to see what other rental properties in Houston are selling for and get ahead of the competition.


What you should do before selling rental property

If you're looking to sell your rental property in Houston quickly and for a great price, there are a few things you should consider doing before putting it on the market:

  • Gather important documents for potential buyers, like a copy of the lease and tenant rent roll, financial reports like a profit and loss (P&L) statement, a list of vendors and maintenance history, and a summary of capital repairs or improvements done in the last few years.
  • Have a professional inspection beforehand and make any needed repairs. This way, buyers won't try to lowball your asking price because of hidden issues.
  • Explain the sale to your tenants, including how showings will be handled and the process of transferring their existing lease and security deposit to the new owner.
  • Calculate your potential capital gains tax liability and explore the possibility of using a 1031 tax-deferred exchange to delay paying the tax by buying a replacement investment property anywhere in the U.S. 


How to price your investment property for sale in Houston

Here are some tools you can use:

  • Cap rate allows you to compare your net operating income (NOI) to similar properties in the area. This can help ensure that your property is competitively priced.
  • Cash-on-cash return accounts for today's interest rates and helps potential buyers understand how much money their down payment will generate. 
  • Determining your property's after repair value (ARV) can be helpful if you cannot make all of the necessary repairs. This will alert buyers that their equity will be instantaneous once the repairs are made.

Request a free consultation and estimate for your Houston property.


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This article, and the Roofstock Blog in general, is intended for informational and educational purposes only, and is not investment, tax, financial planning, legal, or real estate advice. Roofstock is not your advisor or agent. Please consult your own experts for advice in these areas. Although Roofstock provides information it believes to be accurate, Roofstock makes no representations or warranties about the accuracy or completeness of the information contained on this blog.
Jeff Rohde


Jeff Rohde

Jeff has over 25 years of experience in all segments of the real estate industry including investing, brokerage, residential, commercial, and property management. While his real estate business runs on autopilot, he writes articles to help other investors grow and manage their real estate portfolios.

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