Staging a rental property with tenants to sell your home?

Question

I'm looking into selling my rental property in the Bay Area and was wondering if anyone has had experience in staging a property with tenants in it before placing your home on the market? I'm thinking about rearranging my tenant's big furniture items and maybe adding a few more other pieces to market the home better.

Are there incentives you offered tenants to compensate for the inconvenience of living in a staged home, accessing the property in preparation for listing, open houses, and during escrow?

Thanks in advance BP universe!

Dan King · Answer

It all depends on the tenants tolerance level. My experience is that getting the tenants out before the sale provides me the best level of options. I can stage it exactly how I want with no tenant schedules or "mess" issues to work around. Additionally, buyers might feel nervous knowing tenants will be displaced and there could always be a problem getting the tenants out on time. I expect they are month to month right? If they are on a lease that runs beyond your sale date that offers additional unique challenges. I understand getting that extra rent is nice but for me I like the tenants out first so I can properly maintain and clean the property and then stage it for maximum exposure. This provides the realtors the best chance to properly "show" the home with the least amount of potential challenges. This process will enhance your sales price potential that will more than make up for the lost month or two of rent. Good luck!

Chris Mason · Answer

@Sherwin Gonzales - Our younger Bay Area FTHB homebuyers tend to be progressive and concerned about (or at least conscious of) gentrification/displacement. You will 100% lose some interest in that home if you have a tenant in place that will need to be asked to leave.

I have no idea if FTHB tell their realtors about this discomfort, but they seem to like telling me about it. (IDK why young FTHB don't want to be honest with their realtors, but that's a thing too)

You might want to consider waiting until the leases cycle, so you can list/sell vacant. If multi-unit, consider waiting until one lease cycles.

Jay Hinrichs · Answer

@Sherwin Gonzales I just about fell out of my chair.. thoughts of my tenants out in the mid west and my sec 8 tenants.. holy cow they would sell the stuff or it would be destroyed in a few weeks. LOL..

Maybe in SF with the right tenants

Although you bring up a very good point.. one that is lost on many investors.

I want to sell my rental..

Well if your in a uber hot market for retail sales like SF or even here in PDX you can sell with tenant in place generally.. but best to move them out..

So when you move them out and say start to finish your out 3 to 6 months of income.. ( most don't account for this) then you have spruce up to sell 5 to 10k... So many times it cost 10 to 20k to get your home ready and sold. If you buy for cash flow and no appreciation and you must sell you just fubared yourself big time. you only exit is to another investor and keep tenant in place.

Account Closed · Answer

Unless you are paying the tenant, or giving them free rent, they can and should tell you to jump in a lake. Don't bother them in their house until after they leave. Unless you are already friends with this tenant, AND they are happy about the sale of this home, you are asking for a world of trouble.

Ryan Landis · Answer

@Chris M. is spot on with that (this topic is actually not talked about enough here on BP). Recently worked with a client and very early on I was informed that there was no interest in anything that would force someone else out.

If you are selling to an investor, that can be a different story. But even then, if you are not prepared with historical financials (proof of ontime payments, etc.) and proof of how you did the initial screening (i.e. background, credit, etc.) you might run into some issues selling a condo to an investor for market (or close to it).

Gloria Mirza · Answer

Hi Sherwin,

The tenants are in the right to say no about re-arranging their furniture, so I would talk to them in person. If they say no then you could offer them a financial incentive. I'm an agent in San Jose and homes are selling fast hear, so it might not be worth it to leave the tenants in the house for too long while it is on the market.

P.S. if you're looking for a good agent send me a PM, I can help.

Staging a rental property with tenants to sell your home?

Staging a rental property with tenants to sell your home?

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