New to Real Estate · NY · Member since 2019 · 20 posts · 4 votes
Currently property is occupied with tenant. Only tenant and property manager has keys. As an out of state investor, how do I manage showings or allow inspections to be done?
Currently property is occupied with tenant. Only tenant and property manager has keys. As an out of state investor, how do I manage showings or allow inspections to be done?
Why aren't you working on this with your PMC?
NOTE: while landlords want to do end-of-lease showings to minimize vacancies, current tenants do not always cooperate with these showings. Even though the lease and local laws may allow access, tenants can sabotage these showings in several ways:
- Leaving an unattended child in the home alone - Leaving an aggressive dog in the home - Making physical violence threats - Giving negative feedback to prospects during showings
@Jorene T. Doesn't your property manager handle leasing? Your lease should include language indicating the notice procedures to access and show the property when occupied.
@Stuart Udis they handle getting a tenant in but not showing my property if I want to sell it.
If you want to sell it, you will likely get best offer in the property is vacant. This would allow an OO purchase (likely highest value) or new owner to place their own vetted tenant,
it also would allow you to address the typical tenant turn over items (patch and paint, deep cleaning, check everything, etc). This could reduce the odds of a request for big discount based on the inspection.
Everything should go through the PM. Period. Even if it's "your" insurance co that wants to inspect, they should be directed to contact PM for access, and you should notify PM to expect the contact.
@Richard F. If the insurance company wants to inspect, should PM charge for giving access?
That would depend on what your management agreement states. As a PM, I never did.
Also, if your current PM is licensed for sales, why not negotiate a favorable listing agreement with them? They would be much more able to coordinate with the tenant for showings. If they are not licensed for sales, are they licensed for PM? Or is this an individual?
Either way, this is an inconvenience for the tenant, so showings should be very limited, only to pre-qualified buyers, and always accompanied by a licensed agent, and/or plan to compensate them. In general, showing occupied units is problematic for so many reasons...claims of theft or damage; tenant makes no attempt to clean or declutter; worse, tenant badmouths the property or owner. It's better to have the tenant leave during the scheduled period, or, better by far, have the unit vacant for selling (if SFH). I usually would schedule one "open house" every other week, and schedule for the same day as "Broker Tours" for the neighborhood.
Currently property is occupied with tenant. Only tenant and property manager has keys. As an out of state investor, how do I manage showings or allow inspections to be done?
This is pretty common with out-of-state rentals. I’d have the property manager coordinate all access with the tenant and provide the required notice under the lease and local law. For showings, inspections, appraisals, or contractor visits, the PM can either meet them at the property or arrange access through a lockbox if appropriate. I’d also ask the PM to keep a clear record of who is entering and when, rather than giving out keys directly. You shouldn’t need to be physically there as long as you have a reliable local person controlling access and communicating with the tenant.
Currently property is occupied with tenant. Only tenant and property manager has keys. As an out of state investor, how do I manage showings or allow inspections to be done?
Why aren't you working on this with your PMC?
NOTE: while landlords want to do end-of-lease showings to minimize vacancies, current tenants do not always cooperate with these showings. Even though the lease and local laws may allow access, tenants can sabotage these showings in several ways:
- Leaving an unattended child in the home alone - Leaving an aggressive dog in the home - Making physical violence threats - Giving negative feedback to prospects during showings
Do I understand you correctly? You want to sell it FSBO while you are remote and the home is tenant occupied? I literally could not think of a more impossible combination of circumstances.
I assume you are too confident to hear me, but here is what I'd recommend: treat it like a flip. Vacant home, fresh paint and anything else that is needed, staged living room, experienced agent.
@Marcus Auerbach currently hoping to minimize my losses. Open to any way I can do that.
It's called CoS - cost of sales. What ends up in your bank account is the sales price minus CoS. With a traditional sale you are looking at about 6-7%: on top of commission you also have title policy, transfer taxes etc.
With a FSBO your hope is to sell it for more and your buyer hopes is to buy it for less - and they will even tell you: "you don't have an agent, there is no commission, so you can accept a lower offer."
A retail buyer does not want a tenant. And investors try to buy 20-25% below FMV, otherwise it would not be a "good deal". If you are lucky, maybe just 10-15%. That's also CoS. So either way, you have to deal with CoS.
@Drew Sygit from your perspective do you see wholesalers trying to lowball and have a vacant property while investors want it occupied?
Investors vary - some prefer occupied "turnkey", others prefer it vacant to screen & place their own tenants.
FYI: EXPERIENCED investors understand that they will NOT get to walk/inspect an occupied rental until there is a purchase agreement in place. Too many prospective buyers walking through an occupied rental will upset the tenants and they many move.
Why are you targeting selling to an investor instead of an owner-occupant?
@Jorene T. your property manager is your easiest path here since they already have keys and a relationship with the tenant. I'd just have them coordinate directly with the tenant and give proper notice (usually 24 to 48 hours depending on your state and lease), then meet the inspector or buyer on site so you never have to be there in person.
Jorene, I'm a Memphis investor and I think everyone here is answering the question you asked instead of the one underneath it. You're trying to FSBO, remote, with a tenant in place — and the reason that feels impossible is that you're trying to sell to a retail buyer, who needs to walk the house, picture living there, and will need the tenant gone at closing. That's the combination Marcus is right about. But there's a second buyer pool where every one of those constraints disappears: investor buyers. An investor doesn't need staging, doesn't need a pretty showing, and specifically does NOT want the tenant removed — an occupied unit with a paying tenant is worth more to us, not less, because we skip the lease-up. Realistically it's one walkthrough with an inspector, not a parade of showings. Practical version, in order: 1) Pull your rent roll, lease end date, payment history, and last 12 months of maintenance — that's the "listing packet" for an investor buyer, far more than photos. 2) Know your two numbers: what a retail buyer would pay after you vacate, patch, paint, and pay a commission (Marcus's path), versus what an investor pays today, as-is, tenant in place, no commission, no vacancy. The retail number is higher on paper; it's often a wash after the turn costs, the vacancy months, and the fees. 3) Interior access: one visit, coordinated by your PM with proper notice, buyer plus inspector together. Any legitimate investor buyer will do it that way. Also, be careful FSBO'ing to a "we buy houses" wholesaler who ties you up and shops the contract — ask any buyer for proof of funds and whether they're buying it themselves or assigning it. Happy to answer Memphis-specific questions, and full disclosure since it's relevant: buying Memphis single-families is what my company does, so if you want a straight as-is read on the number, my DMs are open — no pressure either way, and the framework above works with any buyer.
@James Jones appreciate the thoughtful and thorough feedback. I actually got mixed signals after talking to some folks. Would prefer to sell it to investors than a retail buyer and for some reason, the agent is telling me that it's better to have it vacant.
I usually request a 30 minute weekday and 30 minute weekend window that works for the current tenants. Like Wednesday 5 to 5:30 pm and Saturday 11 to 11:30 am and try to schedule all showings within those time slots. It usually works well that way for everyone
@James Wise My PM hasn't been responsive when I asked about listing for sale via them. What would be your recommendation?
Hire a new PM who does sales and management. Have that PM remove the tenant, do a quick sale ready refresh and then sell for maximum value to an owner occupant.
We are the listing agent for the majority of the properties that we manage so it is an easy process. When we aren't, we put a LB on the door and the agents have to run all appointments through us and we communicate with the tenant. You may want to a copy of the key and the tenants contact info so that you do not have to rely on the PM.