Monday, July 13, 2009

Food for Thought, When Selling a Property that is Rented or Leased You can sell a home any time to any one with the tenant in place, but you will not have the same pool of buyers that you would have with an empty home. The buyers will most likely be investors, much the same as a multifamily home buyer who is buying the property as an investment to collect rent. Most owner occupied buyers, need a place to live in. Consequently, properties with renters can be problematic. Often, the property value will not be the same as another empty home of similar value. If the property you are selling is rented or leased, the tenant has been granted the use of the property for the term of the lease or rental agreement…even if the home is sold. Other things that potentially impact the sales process when a tenant occupies a home for sale:
  • Will the tenant be cooperative in showing the Property? Most rent or lease agreements require a 48 hour notice to the rent before showing the home.
  • How much time is left on the lease? If you sell the home and the lease is still in effect the tenant goes with the apartment to the new owner along with the deposit, security and any rent due.
  • How well does the Tenant keep the home? This really has to do with how well the property will show to interested buyers.
  • You may want to talk to the tenant about finding them another place to live so you can sell. Sometimes the owner will negotiate with the Tenant to provide incentives to the renter to move.
  • Examples of this are: Provide financial assistance for the renter to move. Maybe if you have 6 months left, make a deal with the tenant to leave in 3 months as long as they allow you to show the apartment for sale. In exchange you will not collect the rent for these final 3 months?
That’s our view…What’s yours?

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