The real estate market is booming all across the country and this has led some rental owners to consider selling now that the equity has greatly increased on their rental property. But, how do you sell a home if it is currently being rented?
There are two options when it comes to selling an occupied rental property and each one comes with a lot of advanced planning as well as its own set of pros and cons. Let’s take a look at each option for selling a tenant occupied property.
Wait for the tenant’s lease to expire
Pros
- This Gives Plenty of Time to Freshen/Update the Property: An empty home allows you to repaint, deep clean, update, upgrade appliances, or any other general spruce ups the home may need on your schedule. These quick updates can help you get top dollar for the property.
- Makes for an Easier Closing: If the home is empty when it is listed you can market it as move in ready. There is a possibility of closing faster and there is no need to worry about the current tenant being able to move out on time.
Cons
- Mortgage Carrying Costs: While the home is sitting empty, if you are currently mortgaging the property you have to pay the mortgage. This is a lot to consider because there is no guarantee of how quickly your home will sell, even in a great market.
Sell the Home While Occupied by Your Tenants
Pros
- The incentive for Another Investor to Purchase: Having a rental property with tenants already in the home can be a big selling point to a real estate investor looking for more properties. It will save someone who is planning to keep the home as a rental from having to find tenants.
- Staged Home: When a home is set up with furniture it is easier for a buyer to imagine themselves living in the home. It gives them a picture of how certain areas of the home can be used and fit their lifestyle needs and what they are looking for.
Cons
- Tenants can Make Showings Difficult: It can be tough news to find out your home is being sold and you need to move. If your tenant leads a busy life it can also be difficult for them to have the home showing-ready clean. Tenants keeping the home spotless and being willing to not be in the home for a showing is crucial.
Related: Have an inherited property? How to know if it’s time to sell
Review Your Lease Agreement to Help You Determine Which Option
To help you determine what your next step should be in selling your tenant occupied property you should look over the current lease agreement. An experienced property manager or real estate agent is a great help to determine local legal requirements as well as offer some tips on the best options. Going over your lease will also help you to determine how you will communicate the news to your tenants that you are selling the property.
If you need help selling a tenant occupied property in the Savannah area please give me a call. I have extensive knowledge and experience in real estate and property management in Savannah.
https://helenmiltiadesrealty.com/tips-taking-care-rental-property-maintenance/
