If you own rental property in Jacksonville, now could be a great time to sell. The market is ripe for sellers, with low inventory and high demand from investors. Real estate market stats show why Jacksonville is a hot spot for investment right now:
- Employment, population, median household incomes, and median property values are all on the rise in Jacksonville (Data USA).
- Home values in Jacksonville have increased by about 95% over the last 5 years, creating the perfect opportunity for owners to sell and turn equity into cash (Zillow).
- Rents in metropolitan Jacksonville are rising year over year, a key statistic that every real estate investor wants to see (Zumper).
Jacksonville ticks many of the boxes investors look for, so you could get multiple offers when you list your property for sale. Before listing, it's important to understand all of the options for selling your rental property in the greater Jacksonville area if you want a fast sale at a fair price.
Your options for selling rental property in Jacksonville
Selling a rental property that is currently occupied by a tenant has its benefits and drawbacks. Some landlords try to get the tenant to leave before their lease is up, while others list the home as a tenant-occupied investment property.
However, it is important to think things through and do your research before taking any action. There are 2 key things you should look into:
- Your current lease: Read it thoroughly to understand your rights and the tenant's rights. In some cases, the lease will allow you to terminate the agreement early with proper notice. Other times, 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.
- Landlord-tenant laws in Florida: It is crucial that you make sure you are doing everything by the book.
The next step is to decide on the best option for selling your rental property in Jacksonville:
1. Sell to your tenant
If you're thinking about selling your rental property in Jacksonville, why not sell it to your tenant? If they've been renting for a while, they might be interested in buying. This can save you time and hassle by avoiding having to list your property on the multiple listing service (MLS). Just be sure that your tenant gets preapproved for a mortgage and that you use the right real estate contract for selling a home in Florida to protect both you and your tenant-buyer.
2. Pay the tenant to leave early
You can try offering a cash-for-keys incentive to get the tenant to move out before their lease is up. A cash-for-keys incentive is when the landlord offers the tenant a sum of money (sometimes equivalent to one or 2 months' rent) to move out before their lease is up. This will give you time to make any necessary repairs and list the property for sale.
3. Wait for the lease to expire
If the tenant doesn't want to buy or leave early, you'll need to wait for the lease to expire, but you can always list it a few months before the lease is up. However, it's important to give your tenant proper notice before any showings and make sure that they'll cooperate. Additionally, remind them that they need to leave the property in good condition when they move out if they want to get their security deposit back.
4. Sell with the tenant in place
Using an online listing platform like Roofstock is another good option to consider for selling your rental property in Jacksonville. With Roofstock, you can sell your house with a tenant in place, which can save you time and money:
- Continue collecting your rental income until the day your transaction closes.
- By reaching a global network of qualified real estate investors on Roofstock, you have a larger potential buyer pool than if you were to list with the MLS.
- Selling on Roofstock involves a competitive real estate commission—3% versus the typical 5% or 6%—meaning more money in your pocket.
- You can research the Roofstock Marketplace to see what other rental properties in Jacksonville are selling for to help ensure you're competitively priced.
What you should do before selling a rental property
If you want to sell your rental property in Jacksonville fast and for top dollar, there are a few things you can do:
- Compile a buyer package, including documents such as a copy of the lease, tenant rent roll, financial reports, a list of vendors, maintenance history, and a summary of all capital repairs and improvements done in the last few years. This will give potential buyers a clear idea of the benefits of buying your property.
- Have a professional property inspection done and make any needed repairs before putting your rental property on the market. This will show buyers that you're serious about selling and that they won't have to worry about any hidden problems.
- Explain to your tenants the property is for sale, how showings will be handled, and the process for transferring their existing lease and security deposit to the new owner. This will put their minds at ease and prevent any misunderstandings down the road.
- 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. This will help you maximize your profits from the sale.
How to price your investment property for sale in Jacksonville
It goes without saying that you'll want to make sure your property is competitively priced. However, this can be tricky, as you want to take into account the square footage of your property as well as its financial performance:
- To help potential buyers understand the value of your property, calculate the cap rate by dividing the net operating income (NOI) by the asking price, then review the Roofstock Marketplace to be sure you're priced competitively.
- Use cash-on-cash (CoC) return to show buyers how much annual pretax cash flow their down payment will generate at today's current interest rates.
- If there are needed repairs, determine the after repair value (ARV) so buyers know the instant equity they would receive once all deferred maintenance is completed.
Choosing the right option for selling your rental property in Jacksonville will help ensure a quick sale at a great price. Get a free price estimate and consultation.