Market offers a unique opportunity to Exchange or Sell a Rental Home

by Huntington Beach Realtor Scot Campbell, February 11, 2013

Since Huntington Beach tenants are paying rent they feel they are entitled to “quiet enjoyment” of their home.  And, this is understandable.

Sold Sign Huntington BeachMarketing a home which is tenant occupied is traditionally one of the more challenging jobs for a Realtor who is trying to get top dollar for the seller.   Tenants normally do not want to move… or would be pleased to postpone the move as long as possible.  So, tenants have little or no motivation to cooperate with marketing efforts and property showings.  These homes seldom show as nicely as owner occupied properties, and I have had many tenants say no “for sale” sign, no open houses, and showings by “appointment only”.

Normally, all these conditions lead to fewer showings and a lower sale price for a rental home when home inventory levels are at “normal levels”.

However, today’s “record low” level of homes for sale makes NOW one of the best times I have ever seen to sell a tenant occupied home.   This market offers a unique opportunity for rental home owners to get top dollar for their property. 

Since there are so few homes for sale, home buyers will gladly wait a day or two to get an appointment to see a home and they are willing to overlook the need for cleaning or repairs.  The buyers simply want to find something which meets their general parameters and lock in a mortgage at today’s near record low mortgage rates.

What is better, to Sell or Exchange?

If you own a rental home with significant equity it is possible to exchange the equity into another rental property (either a local property here or another one outside of Orange County) without incurring an Income Tax Liability by using the IRS approved 1031 Exchange.   Real Estate Investors have been using this technique for years, and there are many examples of people who started with one rental house, exchanged into a fourplex, and then exchanged into an eight unit building, and so on.

If you own a rental home which has had little or no capital appreciation during your ownership, there may be no need to do an exchange.  A straight sale will free up your equity for other uses.

I always recommend that investors discuss tax matters with their CPA before making a decision on the sale of investment property.

I am glad I could share with you this “good news” about today’s market for owners of rental homes.  For updates on the Huntington Beach real estate market, check my website regularly:  www.HowsTheHBmarket.com.

For questions about buying and selling real estate in Huntington Beach and Coastal Orange County, contact Scot Campbell.

Scot Campbell is an expert in the Huntington Beach market area

He is the President of The Scot Campbell TEAM at Coldwell Banker-Campbell Realtors in Huntington Beach, CA.

He has been a licensed broker for over 21 years and has brokered over 1000 homes and just about every type of transaction imaginable.

Read his profile and client reviews at www.ScotCampbell.com

He can be reached at 714-960-0700 at the office, 714-336-0394 on his mobile number or via email at Scot.Campbell@ColdwellBanker.com

photo by: AKZOphoto

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