Have a tenant in there until October 31st. Several agents familiar with the area say that, contrary to general advice/trends, sales are constant year round (one even says that in that particular area, they're strongest November-January). I'm a little hesitant and waiting for some more clear data from them to back this up.
In regards to the tenant living there, do you think it would be best to have him out and THEN begin photographing, fixing, and showing the property? The agent we like seems to think that houses sell better with furniture in there, as long as the person is neat, doesn't have ridiculous style, and is willing to allow the agent to show it to buyers.
One of the other agents suggested we try to sign the tenant to a 6-month lease and sell it in late Spring/Early Summer.
Thoughts? Comments? Suggestions?
Selling in winter is never a good time to sell. People who buy during that time are people who need to buy, not want to buy. Not saying it will not sell, just not the best time to sell it.
Terrible idea to sell it while a tenant is there. There's a difference in staging and someone living there. The tenant does not care if you sell it or not. They will not be accommodating and scheduling showings is going to be a nightmare. Get them out, take time to fix it, then photograph it, then list it.
6 month lease is a great idea if you can get it. Another option is to extend the current tenant's lease 6 months. Even if you offer a slight discount in the rent for this, you'll keep your expenses low by doing this (turnover, vacancy)
Real estate sales are a seasonal event as I have learned. Winter, and especially around the holidays is completely dead season. The only buyers are those that MUST buy a house. Your negotiating position will be less as there will be less buyer competition.
I'd advise getting the tenant out, cleaning, renovating and then listing.
If you MUST keep the tenant for whatever reason, I'd offer them a cash incentive to keep the property clean and well maintained. $100 off their rent or whatever you agree to. This doesn't automatically translate to them actually doing that.
While furniture is a benefit, there's a BIG difference between staged furniture and a tenant just leaving crap around the house.
The other thing you have to think about is scheduling showings. Most people can only view properties after 5PM or on weekends, which is exactly prime time for your tenant being home. It definitely makes things harder.
I work for a property management company here in Nashville. Our policy for the winter months is exactly what you're thinking of. We either extend the lease of our current tenant or place a tenant in there for 6-months. Although the tenant might not be paying market rent, it beats having the place sit vacant for 3+ months (unless they've trashed the place and you really don't want them there anymore).
I'd encourage you to look into stats about home sales for your area during those winter months. Your local Realtor association should put out monthly statistics for home sales. In Nashville, there has been a big drop off in both the volume of sales and the median sales price during the winter months.
Highly recommend that you have professional photos done of the property after the tenant has moved out. If you look on Zillow or any other site, I see far too many properties with iPhone pictures (sorry Apple, I know that you've invested a lot into your camera quality). Professional pictures will instantly make your property stand out.
What does your lease say about showings? How long of notice do you have to give your tenant before you can do a showing at the property?
Well everybody, I heard back from the PM that the tenant has agreed to sign a 6-month extension.
I can breathe again!
@Joseph High definitely will be waiting till he's out at the end of April to clean, fix, stage, and professionally photograph. Part of the reason we decided against selling this Winter was because we weren't getting clear data from any of the 3 listing agents we were feeling out.
Thanks for the thoughts and advice, all three of you!
My opinion is different so I'll throw it out there. If you have a tenant in there paying near top market rent, it could be a great turnkey property for an investor parking cash.
that's how my duplex in the hood sold for 193k last week. Rented at 1690/mo. Foreign investor parking cash I believe. This property had little capex to do and was in better shape than all the neighbor properties.
I would have gone MTM lease if thinking about selling. It covers both investors buying with a tenant in place and somebody wanting the place empty, as it’s easy to terminate lease before closing.