Having a rental property in Maryland is a great investment. Sometimes though, it can be exhausting, costly, and time-consuming. You need to pay attention to tenants, property maintenance and repairs which can sometimes feel overwhelming. Managing property taxes, insurance and maintenance costs can also affect your profit each year. If the situation is driving you crazy, a great next step is to sell your house fast in Maryland for cash. Selling a rental property for cash can save you time, money and headaches. High Speed Home Sale offers a competitive cash offer with timely closure. Before selling a rental property, there are certain things you should consider.
Why Sell a Rental Property
Leverage the Equity
As time goes on, the value of the property rises and you gain equity. You probably have large equity if you have owned the rental property for a long period. Selling when your equity is high can maximize your profit and allow you to use that money for something else.
Inherited Rental Property
Sometimes, inheriting a property is not always beneficial. The responsibility of maintaining and managing the property might not be financially feasible. Selling the inherited rental property provides liquidity for the asset, and the money can be split among the beneficiaries.
Major Building Repairs
Maintenance is always needed in rental units. But substantial repairs, such as a new roof, new plumbing, or structural work, can be a frustrating burden. These repairs can be expensive, and selling a property as-is can be a good idea if you want to salvage your equity and profits on the property.
No Positive Cash Flow
A good investment in a rental property should earn a positive cash flow. The income generated should be higher than the normal expenses, like the mortgage, insurance, taxes and maintenance. It might be time to sell if your rental property is not generating positive cash flow and is actually consuming your money.
Troubled Tenants
Troublesome tenants are a common issue in rental properties. Challenges like late payments, property damage, or legal issues can be a nightmare scenario for you as the property owner. The stress and time spent dealing with problematic tenants sometimes outweighs the benefits of owning the rental property. In those scenarios, we can be the cash home buyer you’re looking for.
Selling a Rental Property With Tenants
Selling a property with tenants in place is possible, as long as the tenants are informed based on the situation. Maryland law does not require notifying the tenants of a property sale because the tenant is in a contractual lease until expiration. However, tenants have some rights, and you must follow the state’s laws to have a proper and legal transaction with tenants in place.
Right to Notice
If the tenant is on a week-to-week or month-to-month lease, you are required to provide written notice to the tenant if the new owner will not continue the lease agreement. For the week-to-week lease, the tenant must be given at least one week written notice. For the month-to-month, a one month notice is required. If the seller is showing the property to potential buyers, the tenant must be given reasonable notice of the showing (usually 24-48 hours is standard).
Right to Stay
A tenant’s lease is valid until it expires, and this does not change even if the owner of the property changes. The previous lease agreement binds the new owner, unless the new owner works with the tenant to craft a new lease agreement.
Taxes and Rental Properties
Capital Gains Tax
Capital Gains tax is charged based on the profit you make from selling the property. If you have owned the property for a year or less, it will be considered a short-term capital gain. It is taxed under the regular income tax rates, which can go up to 37%, depending on your tax bracket.
If you have owned the property for over one year, the profit is taxed as long-term capital gain. The taxes on long-term capital gains are relatively low and stand between 0% and 20%, depending on the taxpayer’s income.
1031 Exchange: Deferring Taxes
This tax strategy allows you to delay the payment of capital gains taxes by using the money from the sale to purchase another similar asset. In other words, it shifts your tax liabilities to when you sell off the new property. However, a 1031 Exchange must follow the set rules of the IRS and be done within a specified timeframe.
Depreciation Recapture
Depreciation allows you to reduce your taxable income based on the costs associated with the property each financial year. However, when you sell the property, the IRS requires that you ‘recapture’ this depreciation. The amount that is recaptured is subject to a tax of 25%. Therefore, the cost has to be factored in when planning on selling.
Benefits of Selling Rental Property To Cash Home Buyers Maryland
With High Speed Home Sale, you can avoid future tax issues by selling your rental property. By quickly closing the sale within 7-14 days, sellers can control the capital gains taxes and depreciation recapture, securing the profit they desire. High Speed Home Sale pays for closing costs such as state and local transfer taxes, which minimize the seller’s expenses. Selling a rental property in an ‘as-is’ condition avoids costly repairs and lengthy paperwork, enabling you to swiftly deal with any tax considerations.
Sell the Rental Property with High Speed Home Sale
Here are a few great reasons to sell your property ‘as-is’ to High Speed Home Sale:
Faster Sale
With us, you get a fair cash offer within 24 to 48-hours. The sale can close in as little as a week.
No Need for Repairs or Renovations
We buy houses in Maryland without any repairs or renovations. We purchase properties as-is, so you won’t need to invest the time or money in costly repairs or upgrades.
No Appraisal
We do not ask for a professional appraisal report. Our team will come to your rental and evaluate the value of your home.
No Commission Fees
A large chunk of home sale profits go to commission fees. You don’t need to deal with a real estate agent in a cash sale with High Speed Home Sale, and you will pay no commission fees.
No Closing Costs
We pay for closing costs and all other expenses associated with the rental sale. We have no hidden charges, meaning our offer is the full amount you’ll receive.
Contact Us to Sell Your Rental Property
The sale of a rental property in Maryland does not have to be complex and tiring. At High Speed Home Sale, we pride ourselves in helping property owners sell their rental properties fast, even if tenants occupy the property. We purchase homes in northern Virginia, Maryland and Washington D.C., and manage all the issues, including tenant rights, taxation of sales, and repairs. If you are ready to sell your rental property, contact High Speed Home Sale for a quick and easy transaction.