When to Sell a Rental Property


Many people own rental properties but don’t know when the right time to sell is. Selling a rental property can be a complicated process, and there are several factors you need to consider before making a decision. In this blog post, we’ll discuss some of the key things to think about when deciding whether or not to sell your rental property. We’ll also provide some tips on how to get the most out of your sale. So if you’re thinking about selling your rental property, keep reading!

Table of Contents

Selling Rental Property Taxes

If you’re thinking about selling a rental property, there are a few things you should keep in mind, especially when it comes to taxes.

First, if you’ve owned the property for less than five years, you’ll be subject to capital gains tax on any profit you make from the sale. Capital gains tax is generally lower than ordinary income tax, but it’s still something to be aware of.

Second, if you have depreciation deductions on the property, you’ll need to pay “recapture tax” on those when you sell. Depreciation is an accounting method that allows investors to spread the cost of a property over several years. So, for example, if you paid $100,000 for a rental property, you could deduct $10,000 per year for 10 years. But when you sell the property, you’ll have to “recapture” that depreciation and pay taxes on it.

The good news is that there are several strategies you can use to minimize or even eliminate capital gains tax on your rental property sale. One is to exchange the property for another investment property (a process known as a “1031 exchange”). Another is to wait until you’ve owned the property for at least five years, at which point long-term capital gains tax rates will apply.

When to Keep a Rental Property

There are a few cases where it makes sense to keep a rental property, even if it’s not ideal from a financial standpoint.

First, if you have a good relationship with your tenants and they’re paying their rent on time, it may be worth keeping the property for stability’s sake.

Second, if you live in an area with high demand for rental properties, you may be able to charge higher rents and make a good profit even if the property isn’t appreciating in value.

Third, if you have a lot of equity in the property and you’re comfortable with the risks involved, you may want to keep it as a long-term investment.

Fourth, if you’ve made significant improvements to the property that would be costly to replace, it may be worth keeping it so you can reap the benefits of those improvements.

Finally, if you have a personal attachment to the property, it may be worth keeping it even if it’s not the most financially advantageous thing to do.

How to Sell Rental Property Without Paying Taxes

If you want to sell your rental property without paying any taxes, there are a few things you can do.

First, you could exchange the property for another investment property through a 1031 exchange. This allows you to defer paying any capital gains tax on the sale.

Second, you could wait until you’ve owned the property for at least five years. At that point, you’ll be able to take advantage of long-term capital gains tax rates, which are lower than short-term rates.

Third, you could sell the property to a family member or friend. If you do this, you may be subject to “gift tax,” but it’s still likely to be lower than capital gains tax.

And fourth, you could donate the property to a charity. This would allow you to avoid paying any taxes on the sale, but you would also have to give up the property.

When is the Best Time to Sell a Rental Property?

The answer to this question depends on a number of factors, including your personal financial situation, the current market conditions, and your goals for the future. If you’re thinking about selling your rental property, it’s important to consult with a financial advisor to get an accurate picture of your personal finances. You should also pay attention to changes in the real estate market, as this can impact the value of your property and how much profit you stand to make from a sale.

Of course, there’s no perfect time to sell a rental property. Ultimately, the decision comes down to your personal circumstances and what’s best for you financially. However, there are certain times when selling may be a more advantageous move than others. For example, if you’re facing financial difficulties, selling your rental property may be the best way to free up some cash. Or if you’re looking to retire and don’t want the hassle of being a landlord anymore, selling your rentals could be the right choice.

Another thing to consider is the current market conditions. If home prices in your area are rising, it could be a good time to sell since you’ll likely get more money for your property. On the other hand, if prices are falling, you may want to hold onto your rental property until the market recovers.

Tips for Selling a Rental Property

If you’ve decided that selling your rental property is the right move for you, there are a few things you can do to ensure a successful sale. First, it’s important to set a realistic price for your property. If you overprice your rental, it could sit on the market for months without attracting any buyers. On the other hand, if you underprice it, you could lose out on potential profits. So be sure to consult with a real estate agent or appraiser to get an accurate estimate of your property’s value.

Another thing to keep in mind is that buyers will be looking for properties that are in good condition. So before putting your rental on the market, make sure to do any necessary repairs and updates. This will help your property stand out from the competition and make it more attractive to potential buyers.

Finally, when marketing your rental property, be sure to highlight any unique features or amenities that could appeal to buyers. For example, if your rental is located in a desirable area or has special features like a pool or large yard, be sure to mention these things in your listing. By highlighting the best features of your property, you’ll be more likely to attract serious buyers who are willing to pay a fair price.

Preparing a House to Sell

If you’re thinking about selling your rental property, there are a few things you can do to prepare it for sale.

First, make sure the property is in good condition and any necessary repairs have been made. This will help ensure you get top dollar for the property.

Second, declutter the house and stage it so potential buyers can see its potential. This will make it more likely that buyers will make an offer on the property.

Third, research the market and set a competitive price for the property. This will help ensure you sell the property quickly and for a good price.

Preparing a House to Sell

Many real estate investors know that you should keep your rentals for at least five years. Why is this? Well, there are a few reasons. For one, it takes time to fully recoup the costs of any major improvements or repairs that you make to the property. If you sell too soon, you may not see a return on your investment. Additionally, it can take awhile to find and screen good tenants. Once you finally have quality tenants in place, it’s generally best to keep them happy so they stay put for as long as possible.

If you’re looking to sell your rental property, selling it to companies that buy houses for cash might be the best option. This is especially true if you’re trying to sell a property that needs significant repairs or updating. These companies are usually able to close on a sale quickly and without any hassle.

Finding Investors Who Buy Homes As-Is

It’s really easy to find companies that buy houses for cash. You can start by doing a simple Google search. Just type in “companies that buy homes for cash” and you’ll get a list of results. You can also check out online directories, such as the one offered by the National Association of Home Buyers. These directories typically include a list of companies that buy homes in your area as well as contact information.

If you’re not interested in working with a company that buys homes for cash, you can also try to find private investors who are interested in buying rental properties. You may be able to find these individuals by searching online or contacting your local real estate investment club.


When it comes to selling a rental property, you have a few different options. You can try to sell it on the traditional housing market, work with a company that buys homes for cash, or find a private investor. Ultimately, the best option for you will depend on your individual circumstances.

If you’re looking to sell quickly and without any hassle, working with a company that buys homes for cash is probably your best bet. On the other hand, if you’re hoping to get top dollar for your property, selling on the traditional housing market may be a better option. And if you know someone who’s interested in buying a rental property, working with them directly could be the most ideal solution.

Selling a House to a Cash Buyer​

Do You Need to Sell Your Rental Property Fast?

Balsamo Homes can definitely help you out! We have years of experience in helping homeowners sell their homes quickly and efficiently. We buy houses for cash as-is with no closing costs, so you don’t have to worry about any of the hassle or stress of the traditional way to sell a house anymore. We can make you a fair offer on your home, and we can close the deal in as little as 7 days! So if you’re looking for a fast and easy way to sell your house, then give us a call at (805) 325 – 7020 today! You can also visit us at Balsamo Homes, or simply fill out the form below to get a fair all-cash offer on your property.

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