If you own a tenanted property, you’re familiar with the ups and downs of being a landlord. But did you know that you’ll face one of your greatest challenges when it’s time to sell?
Tenants do not care whether your place goes for a good price. In fact, they may very well resent being kicked out of their home. So expecting them to keep the place viewing ready – polishing the sink every day, stashing away clutter – is usually wishful thinking. Honestly, most of the time when I take clients through a rented unit it’s disgustingly dirty and does not show well. Prospective buyers are either turned right off – or they see it as a chance to score a great deal.
Either way, it’s not good news for the seller.
But don’t despair: There are steps you can take to smooth the process and boost your earning potential.
Step 1
Review the lease. If your tenant is renting month by month, just give them the required notice and you’re all set! If, however, it’s only three months into a year-long contract, the buyer will have to assume the tenant – and you will have to mention that in the fine print.
Step 2
Give your tenants as much notice as possible so they can start making plans. If you think they might be interested, give them the first option to buy (at market value). You want to create a feeling of goodwill to aid the sale process.
Step 3
If they don’t want to buy, offer them help finding a new place to live. I sold an investment condo last spring, and by helping the tenant land a new home, he cooperated hugely by letting me in to clean, paint and stage the unit.
Step 4
Do something nice for your tenant. Buy them tickets to a ball game or a restaurant gift certificate so they have somewhere to go during an open house. Give a case of beer or a bottle of wine to say thanks for cleaning before a showing (and don’t forget: by law you must provide 24 hours notice).
Step 5
Find an agent (like myself) who has dealt with similar situations. He or she should be able to explain how they will deal with the tenants during each stage of marketing. How will they deliver the best photos possible? What will the ground rules be for showings?
Your agent is critical to the process, as is your attitude to the tenant. Co-operation all around is what will leave everyone happy – and put the most money in your pocket.