When you’re ready to sell a commercial property, you’ll need to talk to an expert agent who can help you get the price you want. You’ll also have to put some plans in place to address any current tenants you have in your property. There will be tax implications.
Details, timing, and expert support will help you have a better selling experience.
Set Your Sales Expectations
When you’re selling your commercial property, establish some expectations and goals, but keep them flexible and realistic. The commercial market doesn’t move the same way the residential real estate market does. You likely have some strong ideas about how much you’ll get for your property and how long it will be on the market. Talk to your agent and broker because your timeline might not match the current mood in the commercial real estate market.
Work with an expert broker who really knows the local market. This will help with expectation setting and it will also give you a competitive advantage when it comes to marketing your property and negotiating with potential buyers.
Decide What To Do Next
Selling a commercial property will come with some tax exposure. You’ll need to pay taxes on any profit you make with the sale. So, it’s imperative that you talk about your plans with a CPA or a tax accountant. You need to know what you’re looking at before you sell because it will impact what you’re ultimately able to earn.
Keep in mind that it’s possible to defer taxes, especially if you’re willing to reinvest your commercial earnings into another property. You can utilize a 1031 exchange. There are some strict requirements and deadlines involved in identifying and closing on a new property, so make sure you’re prepared. You’ll have to find a property or properties that are similar – meaning income-producing properties – and you’ll have to put all the proceeds from the initial sale into that purchase.
Whether or not a 1031 exchange will work for you really depends on your reasons for selling and your plans for future investments.
Talk With Your High Desert Property Manager
Your property manager will need to know that you’re selling the property. Don’t wait until it’s listed. Give them the information as soon as you can – at least 30 days before you decide to put it on the market. This will help them gather the information you might need to have a stronger sales experience, such as lease agreements and rent roll accounting.
An even better idea? Talk to your property manager even before you make your decision. Your management partner understands commercial real estate. You might get some good advice even while you’re weighing your options.
Whether you’re sure you want to sell your commercial property or you’re still in the early phases of exploring how to structure your existing investment portfolio, we’d love to be part of your solution. Contact us at Preston-Lee Management Company. As the longest serving commercial property management company in the High Desert, we have some ideas about what might work.
