Sunday, March 24, 2019 / by Jody Lee
The real estate market is booming, which means that if you have been hanging onto that rental now may be the time to sell!
Of course, if you are a landlord selling a house, there are probably people living in it. Selling with tenants can be a challenge, and a tenant can make or break your sale. You’ll have to plan well in advance, communicate openly with your tenant, and create a plan to get your property sold.
How do I sell a rental property with tenants?
When you decide it’s time to sell your rental property, there are two main courses of action you can take as a landlord: Waiting for the lease to expire before selling, or selling while your tenants are still living in the home. There are benefits and drawbacks to both options.
Wait for the lease to expire:
Allows time for updates: If you’re able to wait for your tenants to move out, you’ll be able to clean, do any cosmetic updates, and just generally spruce up the home before listing, which may help you snag a higher sale price.
Having no tenant can also alleviate timing issues and open it to more buyers. Someone who needs this home to be their primary residence can’t wait for a tenant’s lease to expire. They will need to occupy the home at closing. If the home is unoccupied when you list it, you can accept the best offer without having to worry about timing.
Mortgage carrying costs: Each month without tenants is a month when you’re on the hook for the mortgage payment. If it takes a few months to prepare your home for sale, list, accept an offer, and close, you’ll be responsible for the full carrying costs.
Sell with tenants in the home
Built-in staging: When a home is furnished, buyers often have an easier time picturing themselves living there. If your tenant has taken good care of the home and decorated it nicely, it may be more desirable to potential buyers.
It’s attractive to investors: Having tenants already living in the property is a big selling point for anyone who might be looking to buy the home as an investment property — you’ll be saving them the hassle of finding a tenant!
Disgruntled tenants can make showings difficult: You’ve just told your tenant they may have to move out. And now you expect them to keep the home showing-level clean and accommodate showings and open houses? This can be a difficult pill to swallow, and unpredictable tenants can have a big impact on how the house shows.
In order to persuade your tenants to cooperate with your listing plans, consider offering them lower rent for a few months in exchange for an agreement to show a clean and well-kept home. Other incentives include offering a flexible move-out date or reimbursing moving costs.
Don’t forget you have one other option! Offer your tenant a chance to buy, If your tenant really loves where they live, they might be interested in buying the home.
If you're interested in selling your rentals/investments, please let me know!
Haven Real estate group