Of all the numbers you provided, the only meaningful one is the appraisal value. Buyers aren’t going to care how much you need to net on the sale to clear your loan - they’re going to be looking at comparative sales/appraisal values for the area. You have to price it according to the market for comparable properties, not according to what you “need” to get from it. I don’t see how you can consider what kind of cash flow the buyer ends up with, as you have no idea and no control over their future cash flow management. They buyer could pay you $102K all cash and have positive cash flow…
I’m trying to sell a sf rental property I own. It appraises for around $52k. It currently rents for $450 per month plus utilities. The taxes are $345 per year. I owe $18k. I want to sell it quickly, but need to make at least $18k profit on it. Based on the info provided, what could I sell it for, and still allow a buyer a positive cash flow? A win/win for both parties. Thanks.
Posted by doug,ky on December 06, 2000 at 14:42:09:
Rich, Let me get this straight you owe $18K and want another $18k profit = $36K and It appraises for $52k. Sounds like a deal to me, but why discount the price.
If you want a quick sale, ask full value and give terms. You could L/O this in a heart beat. Or seller finance this too. (here you have lots of options) not only get a handsome profit but some cash flow too.
Selling the property as a rental unit to another investor would be my last choice.
Re: Pricing a rental property - Posted by Jim Rayner
Posted by Jim Rayner on December 06, 2000 at 10:36:22:
From an investor prospective and looking only at it as an income producing property i would put my purchase price in the range of only 26-27K depending on conditon and location. Being a single family home you would be more likely to get the appraised value by selling it to a retail buyer.