You have property that you need to sell but you also need to minimize carrying costs... It can be a tough situation to be in as you are torn between renting it out to tenants for some offsetting income or biting the bullet and putting it on the market to try to sell as quickly as possible. For some, it can be attractive to get that rental income while you try to sell it or may even be necessary. Having tenants has been shown to make it tougher to sell a home, but if you have no other option, here are some tips to help minimize any adverse impact on selling your home.
Before sharing tips, It is worth a quick explanation of how having tenants can make selling tougher... here are three of the more common reasons.
Tenants being accommodating of showings so that you don't miss opportunities.
Tenants not keeping the home in showing condition and unexpected wear and tear on the home
Sellers not being able to to move into the property as quickly
Recognizing that you may be in a position where you must have tenants, here are some tips to help you avoid any potential hurdles with your tenants to facilitate a better and quicker sale.
1. Communicate
Have a conversation with the tenant and let them know your plans to sell the property. During the conversation make sure to let them know their lease will be honored and you’ll be targeting a buyer who’s willing to wait to move in. It’s imperative you reassure them that they won’t be homeless. If you don’t communicate your intentions they might make it impossible to sell your property.
2. Put it in the Lease
Make sure that if you are going to enter into a lease with the intentions of selling that you include language about their cooperation with allowing showings with 24 hours notice and their obligation to have the property in showing condition. Also, try to make the leases for reasonable periods of time so that you don't lose too many potential buyers.
3. Create a Showing Schedule
While only allowing showings on certain days within certain time frames isn’t ideal, it may be the best option. By creating a showing schedule it accomplishes two things; it shows the tenant you value their time and want to inconvenience them as little as possible. It also puts their mind at ease knowing they won’t be bothered 24-7 with showings. The tenant may reciprocate your consideration with being cooperative and more agreeable to doing things that will help your property sell.
4. Offer Money
You could even consider putting an incentive that if they cooperate with showings and keep the house looking good, there will be a financial gain for them (e.g. you will deduct X amount from the rental payments in the months following.) Another incentive could be helping to pay for their moving expenses. If you decide to offer some type of cash incentive make sure to put the terms in writing and have all parties sign off in agreement.
5. Pay for a Cleaning Service
If the property is not show ready you may want to offer to pay for a weekly or bi-weekly cleaning service while the home is active. This benefits the renter as well as helping the property to show its best. By doing so it might motivate them to tidy up and keep the property clean in between showings. In consideration of a showing schedule, setting the cleaning day to be as close to potential show days as possible helps ensure it is still clean for showings.
6. Introduce your Realtor
Connecting your Realtor and doing a proper introduction facilitates cooperation between both parties and the smooth scheduling of showings. This also shortens the process to minimize communication breakdowns or valuable time loss for showing scheduling.
Take the time to give careful consideration on if selling your home with tenants in place is the best decision or if you should wait until the lease is up. If it is or can’t be avoided make sure to know your rights and the tenants’ rights.