Oh, those pesky tenants…
If you’ve decided it’s time to sell your rental property that is underperforming, or if the investment property is scheduled to be sold at a particular interval, and you have tenants already in place, what is the best way to market the property? The soundest investment property advice is that tenants certainly have rights, and you must abide by them. However, planning for the sale is key.
One of the things you should do when taking on any new tenant is to make sure that your rental agreement states exactly how you will have access to their unit when you put the property up for sale. An intransigent tenant can be a major stumbling block to realizing the proper market price on the sale of your property.
Always stay on good terms with tenants
That is why it is important to maintain good relationships with your tenants over the entire term of their lease. Of course, if you have a property management company, they should be maintaining a proper relationship with each tenant as well.
When it comes time to bring your investment property to market, you’ll need to notify each tenant of your intention to sell the property. You’ll also need to give them advance notice well ahead of placing your property up for sale. If they are on a long-term lease, new prospects looking at your house will need access into their unit not just to see the condition of the property, but also to evaluate what kind of tenants they will be inheriting from you.
Avoiding devaluation of your property
A poorly kept unit with a particularly bad tenant can easily blow a sale. For this reason you or your managing agent will need to check out the unit before you put the property on the market. If there are any problems with the unit (for example, if it looks disheveled or needs repairs) then this must be addressed immediately prior to putting your investment property on the market for sale.
Another bit of sound investment property advice: it’s always a good idea to keep your tenants happy. And if you had a problem with one or more tenants prior to putting your house on the market, you might want to consider a token “gift” so that they can help you sell your property. As an example, this might include a gift card to a local dinner establishment. It should not be in the form of a rebate on their rent however.
When your property is being shown…
If real estate agents are going to be showing the house, tenants must be advised ahead of time of all potential showings. You’ll need to set up a system for the listing agency to contact the tenant and obtain their permission to come in to show their unit. At all times real estate agents have to respect the rights of tenants when going to show prospective buyers your property.
It is also important for the listing agent to take pictures of your property with each tenants’ permission for photos inside a tenant’s particular unit. The listing agent should also be giving tenants notice well in advance of any open house they may want to have on the property. (These may consist of broker open houses for the wholesale trade and/or retail open houses – that is, open houses to the general public.)
No perfect way
As an owner of an investment property being readied for sale, it is also important that you understand there is no perfect way in which to sell your investment property with tenants already living there. It will be completely out of your control what the exact condition of each unit will look like when prospective buyers show up at the door.
You also will not have control over sounds or smells emanating from each unit when the property is shown. For this particular reason, it is always a good idea to try to have showings of your property in the morning or early afternoon only, staying away from dinnertime. Smells emanating from tenant’s kitchens at dinnertime can vary tremendously, and some prospective buyers can find it off-putting. And if those buyers intend to make an offer on your investment property, this could devalue their offer.
Make nice with your tenants
The most important investment property advice for a rental property owner when selling their investment property, is that they only have so much control over the presentation of their property when tenants are living there. The best thing that an investor can do prior to marketing their property, is to make “friends” with each tenant in their building. In this way, your tenants can ultimately help you when it comes time to sell your property.
photos courtesy of nicerenter.org, realestatedubaiblog.com, trexglobal.com, howtogetridofstuff.com, mcclurepropertymgmt.com, lets4u.net, tenantchecker.com