When you’re a California landlord selling a rental property, capital gains taxes are one of the many costs that might keep you up at night. Of course, you’ll also have to get the property ready for sale—even minor repairs can add up to a pretty penny. Plus, you can expect to pay a real estate agent and California commission rates are sky-high compared to other states. The expenses of selling just keep adding up. Isn’t there a better way, one that will leave a little more cash in your pocket? If you understand how taxes on the sale of a rental property in California are calculated, you can make a more informed decision about how to go about selling it—and keeping costs down.
Owning and managing rental properties and the tenants who live there isn’t always what it’s cracked up to be, whether your properties are multi-family units or single-family homes. The properties themselves require regular upkeep and renters often need constant attention. And, sometimes, the passive income you get from a property just doesn’t balance out the hassle of keeping it around. That can be especially true if, for instance, you live in Visalia or Bakersfield but your property is in San Bernardino. No one likes being a long-distance landlord. Then again, it’s not easy running rental properties no matter where they are located. So, if you’re tired of being a landlord and all the troubles that go with it, what is the best way to get out? We have some options for you.
A rental property can be a great source of passive income, but the time may arrive when it’s outlasted its benefit. Maybe you’re retiring, have family or financial issues, or perhaps you’re simply tired of being a landlord. But selling investment property with tenants in residence is not as easy in California as calling up your favorite real estate agent. As a landlord, you have responsibilities to your tenants and they have rights that you do not want to interfere with. It’s important to know what your tenants’ rights are and how they could negatively affect your ability to sell your rental property. Even though California landlord laws can make it challenging, it’s not impossible to find a buyer who can handle the complexities of taking on your rental—and your tenants.
The landlord laws in California are some of the strictest in the nation and, though it’s not overtly stated in the statute, these laws clearly favor the rights of renters. If you’ve ever been a tenant anywhere in California, you’ve probably benefited from these laws, whether you realized it or not. As a landlord, however, it’s possible you’ve found that the perk of receiving passive income every month isn’t worth the paper it’s printed on—especially when you’ve had to struggle with troublesome tenants. If you’re in a tough spot now with a rental, and are wondering how to best deal with occupants who are increasingly a problem, it’s important to consider first how the state’s landlord laws could impact your decisions as a landlord.