If you rented out a home you owned instead of selling it during the real estate downturn a few years ago, today’s seller’s market may have you re-thinking.
However, if you have tenants, there are many considerations to make before putting up the for sale sign instead of the for rent sign. Some Realtors® suggest waiting, if possible, for the lease to end and tenants to vacate (although selling an empty house has its own set of issues).
The question then becomes can your afford to have the house vacant for a few months during the transition? Not every landlord can.
First things first.
The first thing you should do if you want to sell your rental property is ask your tenants if they have an interest in buying it.
If they are not interested or are unable to secure financing, etc., the second item on your list will be to know and understand local tenant-landlord laws and rights.
Finally, start the sales process by communicating clearly with your tenants. Be sure to show you respect them by explaining completely the situation you are in and why you want to sell.
With negotiation and a cooperative tenant, selling the property will go much easier.
Clear rules and rewards are the best way to ensure your tenant’s cooperation while the house is on the market. Many agents suggest providing an incentive to tenants for a little extra motivation.
That may include taking a percentage off their rent when they keep the residence clean and are cooperative to prospective buyers and agents in allowing showings.
You could also provide gift certificates for restaurants while the house is on the market to help them keep the kitchen clean and neat, and give them something to do while the house is being shown.
Agree to have your agent work out a reasonable showing schedule with them that is as unobtrusive as possible.
Provide reassurances of their safety and belongings. If they need a safe or safe deposit box for valuables, firearms or prescription drugs, offer to cover that cost.
You may also want to give them a free hotel room on the weekend of an open house or some other perk that might make life easier for them.
If rent has gone up in your area, covering the difference in rent for a couple of months or finding them a rental agent and providing recommendations can also encourage cooperation.
You may decide to cover moving expenses for your tenant, or guarantee extra time to find a place to live before the house is sold.
A valuable ally.
Your tenants can be valuable allies as you try to sell your property, if you work toward mutual agreement and cooperation. If you have a good relationship, they may even want to help you sell.
In the end it is up to you to gauge your relationship and decide when and how to best sell your property. Consult with an Allen Tate Realtor® for more professional advice and insights.
Susan Larkin, Vice President, Marketing & Public Relations