Should I rent a listed townhouse until it's sold?

Question

I have a townhouse for sale that I am getting a little nervous about the length of time it will take to sell.  Want to now anyone's thoughts or advice about agreeing to rent out the unit temporarily until it's sold.  Full disclosure will be given about the circumstances of the listing and tenant will agree to vacate once it sells.  I will give them the last 30 days rent free and the rent covers all the expenses and utilities.  My second exit strategy is to convert to a rental although it hasn't been listed for long and I don't want to go there yet.  Thanks for any tips or advice.

Arianne L. · Answer

@Rich Prestridge It depends on who your target buyer is. From my experience, it is harder to sell a townhouse to an owner occupant if it is rented. Owner occupants buy what they feel would be a good home for them. It is hard to elicit that feeling when your renters are living there. But if your target buyer is an investor. They prefer it to already be rented and "turn key".

Rich Prestridge · Answer

@Arianne L.  Thanks for the insight. My initial goal is to sell to an owner-occupant and not have this as a rental.  Looks like you agree with @Chinmay J. that it would show better if it were vacant or staged well.  I have talked to another investor in this area that had success with selling a similar unit to an investor at a reduced price with a quality tenant which may be another exit strategy.  It seems like I need to ride it out a little longer and reconsider this plan only if I find that unique tenant who can work within this special situation.

Thanks again.

Chinmay J. · Answer

@Rich Prestridge - It is always a good practice to put the house on the market that shows well. If I were putting my house on the market, I would either A) make sure its vacant, cleaned so it "shows well", or B) staged in such a manner so as to attract the best offers.  None of my tenants keep the house tidy as I do.  So as @Arianne L. said, people are not going to feel nice and cozy about a place that is rented out.  This is when you get a lowball offer.

Even as an investor, I would think twice about buying a place that is tenant occupied, if there are other options on the market. I don't know these people. I didn't put them there. How big of a lease do they have left? As a landlord, I want to make sure that I screen my tenants. Thankfully, Northern VA area has robust rental market, so I would rather buy something that doesn't have an existing tenant and then put a brand new tenant, and that way have full control.