When is the Best Time to Sell Your Rental Property?
Monday Dec 11th, 2017
When is the best time to sell an investment property?
Given the price increases over the past couple of years in the GTA real estate market, many investors have most likely thought about cashing out of their real estate investment.
While the strength of the real estate market is an obvious reason to sell, real estate investors must also consider the situation with the current tenant before listing their investment property for sale.
Many landlords don’t understand the legalities of selling a tenanted property. In Ontario the Residential Tenancy Act provides regulations to protect tenant’s rights. For instance, you cannot give notice to the tenant to vacate because you want to sell the property and a sales agreement does not break an existing fixed term lease.
The following are some of the issues a landlord must consider:
- Is there a lease in place and how long is left on the term?
- Will the tenant cooperate with showings?
- Does the tenant keep the property in suitable condition to show to prospective buyers?
- Should you try to sell the property with the current tenant in place or provide for vacant possession?
In my opinion, the best time to sell an investment property is after the tenant has left. While the landlord will lose some income, the benefits outweigh the loss in income. A vacant property is easy to show to prospective buyers. The landlord can clean, paint and otherwise update the property to have it show to its potential. A vacant property can be staged to show off its key selling points. Also with a vacant property, the landlord doesn’t have to worry as to whether the tenant will move out on closing.
If you have a question about selling (or buying) and investment property, give us a call – we’re the investment property specialists.