Do you own an investment property that you’re ready to sell? If that property has tenants, it may not be the ideal selling situation. Tenants come in all degrees of cleanliness, upkeep, and cooperation. As the owner, you want the home looking as good as it can in order to sell it for the highest price, but you can’t guarantee that it will be presented the way you want or be accessible during prime showing hours, because you’re relying on people who have different priorities than you. So, what is the ideal selling situation? An empty home.
But, hold up! You can’t kick out your tenants just because you want to stage the home and have it open whenever you want. You have a legally binding contract with them. Unless you included special terms for the sale of the home in the contract, you have to honor the lease until its end and if the home sells before the lease ends, the new owner has to honor it as well.
Right now, before you list the home or start any preparations, is the time to have a talk with your tenants. Being upfront is the best way to nurture cooperation throughout the selling process. If you want them to provide a reasonable amount of access to the home, discuss what works best for their schedule and assure them their lease will be honored. It may even be a good idea to provide some incentive for their cooperation, like discounted rent or a monetary return at the end, because the property may be yours, but they will have to deal with showings, buyers driving by, and the occasional rude person who may wander into the yard to get a look around.
If the tenant would prefer to stay in the home for years to come, that could be a good selling point for other investors looking to purchase. A secure tenant means less work for the investor. All they have to do is metaphorically step into your shoes after the sale.
During the conversation with your tenant, if you get the feeling that they aren’t going to cooperate, you have two options: 1) Wait until after the lease expires to list the home or 2) offer to pay them to move out. The first option is probably the easiest, but be financially prepared to cover all debts associated with the property until the home sells.
In most cases, if you respect the needs of your tenant, listing the home shouldn’t be an issue. The route you take really depends on your financial needs and the level of cooperation the tenant is willing to provide. Just make sure that the lease requirements are made very clear to potential buyers. Not everyone understands how leases work and accurate expectations are the best way to avoid issues with all parties involved. If the lease is not up until after the sale of the home, the buyers need to know they will not be able to move into the home right away. You will also need to make clear how the security deposit will be handled.
If you’re thinking about selling your Wilmington area home, give us a call! We’re happy to pull together a market value report and discuss your options. There’s no obligation. Give us a call at (910) 202-2546 or send us a message through our Contact page.