Should you sell your rental properties together or separately?
Ask for a price and estimated proceeds for each address, even when the same buyer wants them all. Then request the package terms. You need to know both the value of the group and whether a problem at one house can delay payment for the others.
A group of similar, occupied rentals may suit one investor. A rented house producing income and a vacant house needing major work may appeal to different buyers. Selling a pair together, selling separately, or grouping just the similar properties are all options worth pricing.
What does the package offer leave you with?
Suppose you own two rentals. One is occupied; the other is vacant and needs work. These illustrative figures compare the offers before mortgage payoff.
| Sell as a package | Sell separately | |
|---|---|---|
| Combined prices | $430,000 | $448,000 |
| Estimated seller-paid transaction costs | −$5,000 | −$12,000 |
| Additional preparation and carrying expenses for the separate sales | $0 | −$8,000 |
| Estimated proceeds | $425,000 | $428,000 |
The separate offers are $18,000 higher on price, but the owner expects to keep only $3,000 more. If the vacant property takes longer and adds $4,000 of expense, the package comes out ahead. Conversely, if the occupied rental closes promptly and the vacant house sells without preparation, selling separately becomes more attractive.
Ask these questions before accepting a package
- Must every property close? If a title issue delays one address, can the others close at their allocated prices?
- How was the price allocated? Request each property’s price in writing. Give the allocations and any tax or exchange questions to your tax adviser before accepting.
- Which facts can change the agreement? Identify remaining visits, financing, lease review, and repair assumptions for each address.
- When do I stop collecting rent and paying expenses? Use the proposed closing and possession dates for each property. Account for the mortgage payoff separately.
- Would a smaller group work better? Ask what the buyer would pay for the occupied properties together and the renovation property on its own.
Two Baltimore rentals, two different conditions
Wallace Greene owned one tenant-occupied Baltimore rental and another that had stood vacant for several years and needed rehabilitation. Ultra worked with him on cash sales that accounted for the different conditions. Both closed March 8, 2024. The published story documents two closings on the same day; it does not establish that either closing depended on the other. That’s exactly the term to ask about in your own deal. Read Wallace’s two-property sale