Can I advertise a property for rent before I buy?

Question

So I’m looking at an ideal split level conversion property. But, I don’t want to run the risk of sitting with a vacant property for two months after I purchase. It’s move in ready and rentable.

To give myself ultimate comfort I want to advertise and “verbally” confirm a tenant or two.

Is this illegal in PA? Is it risky? Need tips. I can pay the mortgage without a tenant BUT how nice would be it to have rent to pay for the mortgage and help you get over the closing costs right away?

Best

Lake

Nicholas L. · Answer

@Lake Ingle you say it's move-in ready so the following may not apply, but during a condo purchase a couple years ago I got permission from the owner to fix a minor code violation and clean just before closing.  The date of closing my listing went up and I started getting applicants right away.

Mike S. · Answer

I've had good success with this.  Once under contract, my agent gets permission from the seller agent and owners.  She lists and starts showing the house up to a month before closing.

George Munoz · Answer

Talk to your realtor or brokerage to help you verbiage well and get permission from the current owner while you get the transaction done..

Debbie Consalvo · Answer

We have done it with the permission of the seller.  It is nice to have someone ready to move right in.

Erin Deann Martin · Answer

A good realtor should be able to help you include this language in the purchase contract and also create a lease agreement with a prospective tenant that is contingent upon the sale going through.  We have done this in the past but were explicit in our purchase contract about our right to advertise the property for lease.  Likewise, we secured a tenant and signed a lease agreement contingent upon the property closing, but were actually able to add a clause to the sales contract for a lease-back option from the seller to the tenant for a few days when our closing was delayed. IE, our tenant moved in on the original agreed upon sale closing date/ leasing date, and we paid the seller a few hundred dollars for the couple of extra business days it took us to close (effectively giving them the rent for those days).  Again, I highly recommend being above board with both parties and have strong written agreements in place.

Ryan Proffit · Answer

We did this with the 8 plex we just bought.  It was in the contract, and we also had verbal permission from the owner.

Mark Fries · Answer

@Lake Ingle

I do it all the time and it definitely gives you an advantage.

John Chapman · Answer

This sounds like a terrible idea from a practical standpoint.  So much can go wrong in the purchase of a property, including delays in closing, which means you won't be able to perform if you don't own the property.  Also, a verbal confirmation with a tenant is worth nothing and in no way obligates them to perform.  Basically, you are just collecting unenforceable expressions of interest.  Moreover, how can you collect any money without a written lease in place?  I would close on the property and then advertise it for rent as the lawful owner.  Much, much cleaner.

Larry Alexander · Answer

Yes, advertise with the permission of the owner.