Selling a property that still has tenants
Hello! My name is Thomas Pascarella and I'm looking to sell a property that I previously house hacked but am now using as a rental property. My tenants are leased up until the end of February and my agent says it can't be listed until the property is vacant to schedule showings.
I am curious as to how other investors handle selling properties that are leased. Do I wait until the lease expires to get the listing up and have it sit empty?
People purchase properties with tenants all the time. Are you planning on selling this to an investor or a homeowner? That is the real question. Investors will most likely want a tenant already in the property (if they are good tenants and the rent is close to market).
-
Real Estate Agent Florida (#SL3473500)
- Global Investors Podcast
- https://harborsidepartners.com/commercial-real-estate-podcast/
@Charles Carillo thank you for the prompt reply!
Odds are that a homeowner will be the one purchasing, my confusion is primarily about how showings are handled with tenants already in place. I doubt they are willing to have tours done before they move out. In that case should I just make a note on the listing that "Walkthroughs will begin after (date)"?
I can only attest to Florida law, but here, a landlord can show a property while it’s rented so long as they provide proper notice to the tenant. The tenant cannot unreasonably withhold allowing the landlord to show prospective buyers!
That's great to hear, the property is actually located in Tallahassee so that helps a lot. Thank you for your advice!
The lease should address access to the property.
Double check your lease. If it allows access then you can show it. Of course, the tenants may try to be difficult or make covid related claims. But, don't get all excited before a problem occurs. Good luck.
@Thomas Pascarella
Your agent is just being lazy. Yes, it’s much harder on the agent to have to coordinate with tenants to schedule showings, but if they want to earn their commission they should be doing that. If they’re unwilling you should find another agent.
You can certainly show it while tenants are there, assuming you following the usual notification procedures.
That being said, if you're probably going to be selling to a homeowner, most are going to want it empty and don't want a house where the tenants could potentially refuse to move out, creating a drawn out court process. It may indeed be better to just wait till its empty.
Originally posted by @Thomas Pascarella:
That's great to hear, the property is actually located in Tallahassee so that helps a lot. Thank you for your advice!
Anytime!! The lease should address it too, see Florida statute 83.53 for wording.
I'm an investor in the Tallahassee area - actively looking for houses near FSU campus. PM if you want an interested buyer that could get this off your hands before February when your tenants move out :)
Hmmm that is slightly wrong….
You have to check on local ordinances and or the local board of realtors as they will guide what you can and cannot do… but as I understand it, CA has been the state with the most red tape (with NY and other states) and we have been showing properties left and right.
I think best practices could be:
1. Let your tenants know in advance and either set a date and window of time when people will come by (say Saturday from 1-2-pm)
Or ask them if you can do “by appt” showings. We are always extremely respectful and nice to our clients’ tenants. We sold a property in Pasadena last year that 3 other agents could not sell and I think that we sold it mainly bc of that.
We brought them doughnuts the first time and bought their kids ice create. We explained the process in Spanish to them and were very friendly. They were happy to see us and let buyers in almost any time.
You could also do a virtual tour or 3D tour and market it with that: then do offers contingent on inspection and then set a date and time for maybe 3 of the best buyers to do their inspections (let everyone know what you are doing) : you as in the Realtor helping you sell. Then the buyer can worry about vacating the property or renting it out.
We have sold many tenant occupied properties successfully with multiple offers and over asking. Maybe the realtor is not experienced or lazy…. Sorry