What Should You Do with Your Unwanted Property?
In the real estate industry—especially in the world of real estate investors—we call them “unwanted properties.” An unwanted property is essentially a house, multi-family complex, land or commercial property that isn’t providing you any financial benefit or is no longer of interest to you. Maybe it’s actually a financial burden as it costs you more to own than it’s worth. Perhaps it’s property that was inherited or part of an investment deal, but you don’t have the time to do anything with it. Even though the property may be unwanted, it is still a very valuable financial asset. That’s why you want to make the right decisions when it comes time to sell it.
Typically, unwanted properties will fall into one of these categories:
- Unwanted Investment—Perhaps it’s an investment property you purchased or obtained somewhere along the way. It could be in an area you no longer want to focus on. It takes too much of your time or it’s just no longer a profitable investment in your eyes. It’s not worth your energy or investment of time and money.
- Inherited Property—We see this all the time. Someone inherits a house from a deceased family member. It’s nice to get such a valuable asset as part of the inheritance, but it’s not something you really want to deal with. It costs money to hold onto the property and keep up with maintenance, and renting it out can bring all sorts of other hassles. It’s a house you don’t really need or want to own, so it becomes an “unwanted property.”
- Real Estate Owned (REO)—If a bank or investor forecloses on a house or puts it into short sale, then it often becomes an unwanted property. They just want to get rid of it for the best price they can get.
There are other scenarios that may result in an unwanted property, but those are three of the most common situations we see at PropertyLark. The real question is what should you do with your unwanted property?
Here are your options for your unwanted property:
1. Hold onto It
Of course, you can continue to hold onto it. Whether you keep the house vacant or rent it out, you will retain a valuable real estate asset. You will still be paying for property taxes and upkeep on a vacant property. A rental may generate some nice supplemental monthly income for you, but you will have to take the time to manage it or pay for a property management company. Over time, you should gain money on appreciation, which is a long-term benefit to take under consideration.
2. Sell it on the Open Market
If you want to sell it for the highest possible price, then it makes sense to list it on the open market. You can sell the house as it is or you can invest some time and money in repairs to increase its potential resale value. You may also want to hire a professional real estate agent to represent the listing and get better marketing exposure for the property. An open market home sale may cost you a little more upfront, but could generate the best profit when all is said and done.
3. Sell it to an Investor
Real estate investors are always looking for unwanted properties to buy. They are usually willing to buy houses in as-is condition, which will save you prep time and money on repairs. They are paying cash or have solid financial backing, which allows the transaction to be closed much quicker (we’re talking weeks rather than months in an open market sale). They may also be willing to work with you on creative seller financing options. Lease options, buyer financing and subject-to financing are all methods commonly used between sellers and investors. Depending on your financial situation and ownership stake in the house (whether you own it outright or still owe on it) may determine what your best financing or cash sale options are.
The point is, you have options regarding what you should do with your unwanted property. You can hold onto it and use it to generate short-term and/or long-term earnings. Or, you can sell it in a number of different ways to rid yourself of the burden of ownership, take the cash and move onto something that you are more passionate about.
If you contact PropertyLark, we will give you a fair cash offer on your house. If that’s not the best option, however, we will work with you to determine what selling or leasing option makes the most sense. We’re here to provide you with home selling solutions and we offer many different solutions depending on your personal situation. Fill out our contact form to get started.