Colorado Springs is a great location for rental property owners, but even in high-demand rental markets, selling your rental property sometimes makes financial sense. The challenge for Colorado Springs rental property owners is knowing if and when they should cash in. Read on to learn when you should sell your Colorado Springs property and how you can make the best sale deal possible.
Why Colorado Springs is a great location for rental property owners
Colorado Springs is a great place to own rental properties due to the rising demand for rentals and great tax savings. Colorado Springs’s property tax rate has been reduced from 7.15% to 6.765% for the 2023 tax year. This can make rentals more profitable for landlords. Landlords also benefit from rent prices that match or outperform national averages. 2022 data shows that apartments in Colorado Springs experienced a 6.4% year-on-year increase in average rent. Colorado Springs is also extremely attractive to renters because of the following factors:
- Great hiking trails
- Close to nature
- A wide variety of luxury properties
- Safe neighborhoods with lots of amenities
STRAIGHT TO THE POINT:
Keep an eye on how much your property is worth: Watch out for times when lots of people want to buy or rent in Colorado Springs. Selling when the value is high can make you more money.
Think about how many rentals are available: If there are going to be more rentals than people who want to rent them, it might be a good idea to sell before it gets too hard to find tenants.
Decide if being a landlord is too much for you: Being a landlord can be stressful, so if it’s too overwhelming, it’s okay to sell and use the money for something else.
Get help from experts: Hire people who know about selling houses in Colorado Springs, like lawyers and tax professionals. They’ll make sure everything goes smoothly and you follow the rules.
Make your property look better: If you want to sell for more money, think about fixing up your property by painting, adding nice things, or making repairs.
Use good pictures to show off your property: Take really nice pictures of your house to make it look attractive to buyers. Good pictures can make a big difference!
Advertise your property in lots of places: Put your property on websites where people look for houses to buy or rent. Also, use social media to tell people about it.
Consider selling the house as it is: If you don’t have a lot of time or don’t want to deal with fixing things up, you can sell your property without making any changes.
When should you sell your rental property?
Despite Colorado Springs’ attractiveness as a rental market, there are some factors that can encourage investors to sell. How can you know when the time is right? These are the signs that may indicate it’s time to sell your rental property:
The value of your property has significantly appreciated
Landlords should always keep their eye on the value of their property. Spikes in demand and increased interest in Colorado Springs properties can lead to high prices and high rent. This can be the perfect opportunity for landlords to cash in on their high-value assets. Property owners who pay attention can benefit from market fluctuations.
“While spikes are a great time to sell, being successful in real estate is all about the long term,” said Mike Bang Head of Growth at Azibo, the one-stop-shop financial services platform for rental properties, providing a world-class platform for rent collection, banking, lending, insurance and more. Mike continued, “Buying and holding on to a great rental house in Colorado Springs can secure future financial freedom. Of course, if a better rental property shows up, you could always sell your current rental, 1031 exchange, and use the 1031 section of the tax code to fund the new property. I know several investors that buy houses in Colorado using this strategy for huge gains. Of course, Azibo can help throughout many parts of the real estate deals.”
Supply is about to exceed demand in your area
There are numerous factors that can affect demand for rental properties in any market. Investors should monitor interest rates as cheaper borrowing can lead to movers choosing to purchase a property instead of renting one. Additionally, increases in new construction such as the new condo developments in Colorado Springs could be an indicator that supply will outpace demand in the near future. These factors can increase competition and make it harder to keep rental properties filled — and it might be better to consider a sale to protect your profit margins.
You want to stop being a landlord
While being a landlord can be highly profitable, it also can be very stressful. 88.3% of landlords said that they experience at least some stress while renting out their properties. From dealing with tenant complaints to managing the upkeep of their high-cost assets, landlords can find themselves overwhelmed and spread too thin — especially if they own multiple properties or are individual investors with no institutional support.
5 tips for making a profitable deal
Once you’ve decided to sell your rental property in Colorado Springs, keep these 5 tips in mind to maximize your profit:
Assemble an experienced local team of legal and tax professionals
The first step towards ensuring a successful and profitable sale is to hire a team of legal and tax professionals with experience selling properties in Colorado Springs.
For example, the state of Colorado requires landlords to disclose any imperfections that might affect the buyer. Failure to follow regional rules like this can lead to fines and lawsuits that can devastate your profits.
“Finding experienced professionals that specialize in the real estate niche is often overlooked, but a key element in selling your house fast and getting the most cash you can,” says Shaun Martin, a professional home buyer with over 20 years of experience buying houses all over Colorado, including Denver, Lakewood, Aurora, and Arvada.
Be willing to spend money to enhance the value of your property
In Colorado Springs, buyers have numerous purchase options in a variety of development types — and will consequently avoid properties that don’t measure up.
Your bottom line may benefit from an investment in renovations, upgrades, amenities, and more. To evaluate the necessity of these expenses, scope out what’s on offer in your area. Find out what other sellers are offering and then ensure that your property is competitive.
Ensure that your property is well maintained at all times
Properties that are run down and will require excessive repairs from the new owner can be extremely difficult to offload. Even if a willing buyer is found, the necessary repairs will put all the bargaining power in the buyer’s hands.
Landlords should always keep their properties well maintained by dealing with minor repairs quickly and conducting preventive maintenance to protect the value of their investment.
Use professional photography to show your property in the best light possible
Even if your property is highly marketable and well maintained, it is important to make that come across in a property listing. High-quality photos are a great way to make a solid first impression on prospective buyers. It’s well worth the cost of professional photography to help increase the chances of making it on buyers’ shortlists as often as possible.
Market your listing across all social media and real estate platforms
Once your property is ready to be listed, consider all the platforms used by potential buyers.
Ensure that your property appears on real estate platforms such as Zillow and Redfin. Use social media to amplify the reach of each listing by leveraging your personal and professional networks.
No time to spend on selling your property? Consider an as-is sale
These tips can help you make a profitable deal but can sometimes be overwhelming for landlords.
For sellers in a time crunch or don’t want to deal with the hassle of hiring and managing multiple vendors for a single sale, options where properties are bought in “AS IS” condition are also available.
Regardless of how you choose to cash in on your Colorado Springs property, these tips and options will help ensure that you’re satisfied with the deal’s outcome every time.
