If you are thinking of selling a Tenant Occupied property there are a few challenges you may face. The first thing you must decide is whether to put the house on the market with the tenants still living in the home, or waiting until they move out. There are pro’s and con’s to either decision. Not only will the lives of your tenants be affected, but your decision will also affect your income situation.
One advantage to selling the property with tenants in it is that you will continue to receive income while your home is being marketed and sold. That can also be an attractive selling point to buyers who are looking for ‘income property’. The fact that there are tenants already in place can be a positive selling item. Remember that selling a rental property is the same as selling an owner occupied home when it comes to curb appeal and maintenance. Be sure your tenants are keeping the home in good condition inside and out.
Another point to consider is whether your tenants will be cooperative while selling the property. This not only pertains to the appearance of the property, but in the cooperation with your real estate agent and the agents who would like to ‘show’ the property. If the residence isn’t being seen by buyers because of uncooperative tenants, the property can’t be sold in a fast and smooth manner. Be sure to have your real estate agent set up a schedule with the tenants that is convenient for everyone.
If you determine that your tenants may not be open and cooperative in the sale of the property it may be a better decision, in the long run, to wait until the tenants have moved. In some cases a disgruntled tenant can do more damage than good to a property that’s for sale. They can sabotage the sale in a variety of ways; this can include anything from not maintaining the property, refusing or declining a ‘showing’, or telling potential buyers everything that is WRONG with the property. This scenario may cost you more down the road than the rent you receive. The general rule of thumb is: the longer a piece of property is on the market, the more value it loses. Also, if there are major repairs that need to be done, it may be easier to complete them while the property is vacant.
In either case be sure to weigh your options thoroughly before deciding. If you’re not sure which avenue you should take, contact a real estate professional for guidance. Be sure that he/she has experience in selling rental properties.
Terrie Hunt, Broker/Owner River Ridge Realty (916) 663-6300. “Outstanding Life Member” of the Sacramento Association of Realtors.
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