Rental properties in Augusta are in high demand due to the city's booming economy and great location, so if you own a rental property in Augusta, now may be a great time to sell.
Inventory is low and demand from investors is high. When you take a look at the statistics for the Augusta real estate market, it's easy to see why.
In Augusta, population, median household income, and property values are all trending upwards (Data USA). Home prices in Augusta have increased by approximately 80% over the past five years, with homeowners taking the opportunity to sell and cash in on their assets (Zillow). Rents in the Augusta metropolitan area have been steadily increasing each year, a trend that all real estate investors should be paying attention to (Zumper).
The Augusta real estate market currently favors sellers, so there's a good chance you'll receive multiple offers when you put your rental property on the market. However, if you want to sell quickly and for the right price, you should understand all of your available options before listing your property for sale.
Options for Selling Rental Property in Augusta
There are advantages and disadvantages to selling a rental property with current tenants, which is one of the reasons why landlords try to get tenants to move out before the lease expires. Before you take this route, think carefully and research two important topics:
Carefully read your current lease to understand your rights and those of your tenant. Some leases allow for early termination with sufficient notice. You may need to seek eviction if your tenant violates the terms of the lease (such as not paying rent) and does not agree to leave voluntarily. Familiarize yourself with Georgia's landlord-tenant laws and make sure you are taking all necessary legal steps.
The next step is to determine the best option for selling your Augusta rental property.
1. Sell to a tenant
Before you go through the lengthy process of listing your property on the Multiple Listing Service (MLS), talk to your tenant to see if they're interested in buying. If your tenant has been living in a rental for a while, they may jump at the chance to own their own home.
Some best practices to follow when selling to tenants include getting pre-approved for a mortgage as soon as possible and using a proper real estate purchase and sale contract in Georgia to ensure both you and the tenant buyer are protected.
2. Pay the tenant for an early move-out fee
If your tenant isn't interested in purchasing the property, offering them the incentive of paying cash in exchange for the keys may convince them to move out before the end of their lease.
This means agreeing to cover a tenant's moving expenses or help with the deposit on their new home to give you time to vacate and make any needed repairs before you put your vacant property up for sale. Offering this incentive can save you time and money in the long run.
3. Wait until the lease expires
You may have to wait until the lease is up, or you could put the property on the market a few months before the lease expires. Just be sure to give your potential tenants proper notice before any showings.
One risk associated with waiting to sell a property is that the real estate market may slow down while you are waiting for the lease to end. Another risk is that the tenant may damage the property, reducing its value. It is therefore a good idea to remind your tenant that they must leave the property in good condition when they move out if they want their full deposit back.
4. Sell with tenants present
Selling a rental property in Augusta doesn't have to be difficult, and using an online listing platform like Roofstock can help you sell your property quickly and easily without the hassle of convincing tenants to move out.
Benefits of using Roofstock include:
Collect rental income up until closing date Access a global network of qualified investors, instead of being limited to your local MLS Pay a competitive 3% real estate commission instead of the typical 5% to 6%, and those extra savings go directly into your bottom line
Additionally, by researching the Roofstock Marketplace you can see what other properties in Augusta are selling for, allowing you to price competitively.
What should you do before selling your rental property?
Selling your rental property in Augusta can be a quick and profitable process if you take the time to prepare before putting it on the market.
Gather important documents for potential buyers, such as copies of leases, tenant rent ledgers, financial statements, vendor lists, maintenance records, and an overview of any capital repairs or improvements made in recent years. Conduct a professional inspection of the property and make repairs as necessary to ensure buyers do not underestimate the asking price. Explain the selling process to tenants, including viewings and how existing leases and deposits will be transferred to the new owner.
Finally, don’t forget to calculate your potential capital gains tax liability. If you’re facing a large tax liability, consider using a 1031 tax-deferred exchange to sell the property and purchase a replacement investment property without paying the tax right away.
How to Price Your Investment Property for Sale in Augusta
Of course, you want your asking price per square foot to be competitive, but it's also important to know the key metrics that potential rental property buyers will be interested in. This includes cap rate, cash-on-cash return, and after-renovation value (ARV).
Cap rate is calculated by dividing the net operating income (NOI) by the asking price. Comparing this ratio to similar properties for sale in your area will ensure your price is competitive. Cash-on-cash return tells you how much money your down payment will generate if you finance the purchase at current interest rates. ARV is important to determine if you can afford to make all the necessary repairs. It gives buyers an idea of the property value they will receive as soon as all the maintenance is completed.
Using these key metrics can help you sell your Augusta rental property quickly and for top dollar. Get your free price quote and consultation.