What landlords should know about selling tenant-occupied property
The coronavirus pandemic has brought a lot of hardship to many families all over the world. But whether you lost your job in the last year or not, it’s likely that you’ve started exploring new ways to make money.
If investing in a rental property was one of them, then you’ve come to the right place. There are a lot of great directions to go in when purchasing an investment property — but if you’re looking to get more information on how you can sell your space while still keeping more money in your pocket, look no further.
Ahead find a handful of important tips and questions you should be aware of before diving into selling a tenant-occupied property.
You can sell your property with tenants in place
Bob Pinnegar, President & CEO of the National Apartment Association, told The Post that actually having people living in the house or apartment you are trying to sell “increases the value [of your property] because there is existing cash flow.”
You can sell your property without the hassle of showing it
“Typically, the rental agreement will have specified reasons the unit can be entered with notice; this will allow for showings to occur and outlines when and under what conditions they may happen,” Pinnegar explained.
“An experienced broker can help navigate the process and provide advice. It’s also important to note that, for larger properties, there isn’t necessarily a traditional showing. Instead, inspections are conducted during the purchase process that look at the condition of individual units and the building in its entirety.”
No matter what, Pinnegar recommends that both sellers and buyers should ask advice of an experienced local broker and consider the desired use for the property and proceed accordingly.
The commission rate is usually lower
“While you can always speak with a broker to negotiate a lower commission rate, keep in mind that the seller’s agent will almost always expect a full commission,” Pinnegar explained to The Post.
“Further, simply because a broker offers you a better discount doesn’t mean that they’re your best representative – you want a trusted, established and connected broker who knows how to close deals, not necessarily one that offers a large discount.”
When is it not a good idea to sell a property that is currently occupied?
While there are tons of awesome benefits to selling a tenant-occupied property, according to Pinnegar, it’s not always a good idea.
“Often, selling an occupied property to someone who intends to keep it as a rental can increase the property value as it ensures continued cash flow for the new buyer. If you’re selling to someone who intends to occupy the property themselves, however, you might not get as much as the property is worth,” Pinnegar said.
How will selling an occupied property impact the residents and how should you communicate with your residents if you’re looking to sell?
All of these questions are important to be aware of when going this route. “Selling a property that is currently occupied means that you need to be upfront and proactively communicate with your resident,” Pinnegar said.
“Assure them that their existing rental agreement will remain in place beyond the sale and let them know that, at some point, there may be a notice of entry for a final tour or inspection of the property.”
If you’re new to real estate investing or want more support while you sell your tenant-occupied property, Roofstock is a great resource for you.
Roofstock is a company that helps individuals invest in real estate (whether you’re renting or selling) in a simple, accessible and cost-effective manner.
The brand will help you through the entire process as much or as little as you need. After choosing a property, you can get financial assistance or purchase the property with all cash, title the place in your name and then get matched with a vetted property manager that will handle day-to-day responsibilities — like maintenance and tenanting, if you choose. The best part is that because these rental homes usually already have tenants living there or ready to go, you’ll get cash flow as soon as you close on the house. On the other hand, Roofstock’s team can also help you through the process of selling an already occupied property.
You don’t have to be an accredited investor to get started and you’re able to invest in properties from all around the world since the entire process is done online — so you no longer have to feel constricted to one area.
It’s free to join and view any property you’re interested in (with no hidden fees!) and Roofstock’s search parameter tools are super easy to set up and use to find the perfect place with the best possible deal. Roofstock’s platform offers many benefits that you wouldn’t get elsewhere, including a unique 30-day money-back guarantee and help from experienced professionals to help you through the whole process and invest with ease.