How to sell house fast and higher price for your rental properties especially when you need more cash quickly? You may achieve it by offer your tenant higher rental rate but with some discount. Welcome to read the explanation on below to understand the strategy.
Example:
- Offer 1: Tenant A, Rental $2,000 per month, collects 12 months of rental for one year tenancy agreement ($2,000 x 12 months = $24,000)
- Offer 2: Tenant B, Rental $2,400 per month, free of charge 2 months, collects 10 months of rental only for one year tenancy agreement ($2,400 x 10 months = $24,000)
If you are Home Buyer
Imagine you are a house buyer who is interested to buy a rental property for investment purpose. What will be your concerns? Perhaps is the rental rate of the property, right? Because every property investor intends to know whether the rental they are going to collect sustainable to pay for their home loan installment? Agree? So this is an important point of how your rental rates affecting you to sell your house fast or longer time to be taken. Especially when you know you are planning to sell your property soon.
If you are Home Owner
Now imagine yourself as the property owner who has intention to sell the house fast. Referring to the results of monthly installment amount generated by home loan calculator shown on below, says you are going to sell the property around $400,000 as per your initial plan to rent it as Offer 1, rental $2,000 per month. No doubt, this is a fair deal, because this is what your potential buyer will consider about for a sustainable rental to cover loan installment of $1,800.
But, if you change the deal and offer your tenant rental $2,400 per month as per Offer 2, now you have better chances to sell your property at higher price, perhaps at $450,000 or even more instead of $400,000. Why? Because, referring to the loan installment for a $500,000 home loan is about $2,260 per month. Therefore, home buyer is still comfortable with the price of $450,000 since the rental is sustainable to pay off loan installment. You get the ideal now?
P.S. Do not be greedy and trying to fool our home buyer! Most of the property investors are smart! They are not only look at your property. They are comparing on the rental for units surrounding too. Overpriced rental might price you to miss an opportunity for a good deal with a good home buyer.
