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I bought a house in Upstate NY Jan 2013 and had an unexpected move to Philadelphia a year later. I decided to keep the house and rent it out for the time being. Have had tenants in the house for a year and highly dislike my PM Company. Most recent issues in this thread - Landlord Question - Raising the Rent
The tenants renewed for 6 months pushing them out to this summer and I did end up raising the rent. I don't think they plan on renewing after that. I'm seriously considering selling now and have reached out to my realtor to get the ball rolling. As much as I wanted to keep the house as an investment, I think that the small amount of money I'm making on it as a rental is not worth the major risk involved if something were to happen or the house was unoccupied.
I'm just starting to do research and whatnot and want to make this as easy on my tenants as possible. I'm going in with the assumption that they will be cooperative because they don't plan on staying anyway. But regardless, their lease is up in 6 months and I don't have to renew.
Any advice or things to be aware of? Again, just starting to sit down and seriously research this, so I would just like to hear of any other similar experiences, advice, horror stories, I'm all ears!
We are in the process of selling a house that has been rented the last 2 1/2 years. We told the tenants early on that we had intentions to sell before the 3 year mark was up (so we qualify for the 2 of the last 5 years capital gains exclusion). They thought they wanted to buy it but changed their minds when we gave them a deadline to qualify for the loan.
Even though we are under a tight deadline, we decided not to list the house until they were out. For one, they have 2 small kids and they're not tidy people. All I can say is that we are putting $5K into it to fix it up to sell. Besides being dirty, the yard is a mess and there are a few minor problems we noted after they moved. I'm glad we waited.
So, it kind of depends on a couple of things. What's your target market, an investor or someone looking for a move-in ready home? Are you willing to list it for less than full market value to allow for some repair/cleaning that needs to be done? What is the market like? If it's robust, you might not need to do anything, but if there's adequate inventory, you will likely be at a disadvantage over homes that are move in ready or updated.
We are in the process of selling a house that has been rented the last 2 1/2 years. We told the tenants early on that we had intentions to sell before the 3 year mark was up (so we qualify for the 2 of the last 5 years capital gains exclusion). They thought they wanted to buy it but changed their minds when we gave them a deadline to qualify for the loan.
Even though we are under a tight deadline, we decided not to list the house until they were out. For one, they have 2 small kids and they're not tidy people. All I can say is that we are putting $5K into it to fix it up to sell. Besides being dirty, the yard is a mess and there are a few minor problems we noted after they moved. I'm glad we waited.
So, it kind of depends on a couple of things. What's your target market, an investor or someone looking for a move-in ready home? Are you willing to list it for less than full market value to allow for some repair/cleaning that needs to be done? What is the market like? If it's robust, you might not need to do anything, but if there's adequate inventory, you will likely be at a disadvantage over homes that are move in ready or updated.
Thanks for the feedback!
Thankfully they are pretty clean people, I've seen the house since they've been in there. I did all the repairs needed before I listed it for rent, so I can't imagine that anything major would have to be done. I guess I would be looking at someone that wants to move in as soon as the tenants are out (or they can negotiate with tenants to be out sooner). Any cleanup required would be taken care of by my PM Company with $$ from the housing account or security deposit as needed. My initial emails with my realtor indicate that the market is much better up there now than it was a year ago, especially for my pricepoint and the specific location of my house.
Well - as a potential buyer, I would not buy a house that has renters occupying it. Their agreement is with you (the current owner), and I would not want to have to deal with potentially having to get them to leave the property if they decide they don't have a better alternative. Also, it matters when it comes to getting a mortgage. In many instances, a buyer has so many days to begin living in the house in order for it to qualify as their primary residence. Of course someone could be buying it as investment property, but who knows..
Well - as a potential buyer, I would not buy a house that has renters occupying it. Their agreement is with you (the current owner), and I would not want to have to deal with potentially having to get them to leave the property if they decide they don't have a better alternative. Also, it matters when it comes to getting a mortgage. In many instances, a buyer has so many days to begin living in the house in order for it to qualify as their primary residence. Of course someone could be buying it as investment property, but who knows..
Totally understand where you're coming from. And with that in mind, I would be ok going into this knowing that even if I list it now, it probably won't sell until towards the end of the lease. But I would hope that by then, there would be enough people seeing it to want to put a bid when it's ready. I just need to minimize the vacancy as much as possible.
I'd like to ask you not to list with tenants in place.
Twice now, my family has had to live in houses that have been put up for sale during our tenancy.
Both times it's been a truly awful experience which completely dominated our lives for months and put us all through a great deal of stress.
I wouldn't wish it on my worst enemy.
I would be ok going into this knowing that even if I list it now, it probably won't sell until towards the end of the lease...
Are you thinking of listing it 6 months before you expect the actual sale to take place. So do you plan to overprice the home, knowing that nobody will really want it until you drop the price 4 months from now?
There are a lot of buyers that want to purchase within 1-2 months. If you list it now at normal market price, you'll lose a lot of possible buyers if you cannot get rid of the tenant/close for 6 months.
Maybe you should have a discussion with your tenant to see if they are willing to take a payoff from you ($$$) to move out before the lease ends IF you have a pending sale that wants them out. In other words, see if they would take $2000 lump sum to move out early. But the tenant doesn't have to do this. They can decide to stay until the end of the lease.
I'd like to ask you not to list with tenants in place.
Twice now, my family has had to live in houses that have been put up for sale during our tenancy.
Both times it's been a truly awful experience which completely dominated our lives for months and put us all through a great deal of stress.
I wouldn't wish it on my worst enemy.
Could you please elaborate?
Quote:
Originally Posted by sware2cod
Are you thinking of listing it 6 months before you expect the actual sale to take place. So do you plan to overprice the home, knowing that nobody will really want it until you drop the price 4 months from now?
There are a lot of buyers that want to purchase within 1-2 months. If you list it now at normal market price, you'll lose a lot of possible buyers if you cannot get rid of the tenant/close for 6 months.
Maybe you should have a discussion with your tenant to see if they are willing to take a payoff from you ($$$) to move out before the lease ends IF you have a pending sale that wants them out. In other words, see if they would take $2000 lump sum to move out early. But the tenant doesn't have to do this. They can decide to stay until the end of the lease.
Oh no, I'm not listing it right this second - going to be at least a few months. I'm in research mode right now and just seeing what options I have. I'm thinking it won't go live until late April/early May. But I literally just started thinking about this days ago. I want as much info as possible so that when I am ready to tell the tenants, I can provide them some options as well. Paying the tenants to leave early is one of the things I'm considering. Thank you for the insight!!
Most leases have a whole section devoted to 'how things go if you list the house for sale while they are in it.' For example, real estate agents may have to give them 24 hours notice before they show the house. This is reasonable but also a huge detriment to selling the house, because you lose out on people just 'in the neighborhood' or coming down for the day to hunt for a place.
As for being the tenants, it's miserable because your landlord is suddenly obsessed with making the place as presentable and spotless as possible when previously they were probably only concerned that it wasn't on fire or a meth lab. Shoot, our house is going up for sale in a couple months and the only landlady I have is my wife, and THAT's going to be a pain since I work from home!
Selling a house -- or, rather, keeping a house in a condition where it can be sold quickly -- is tons of work. Tenants have no incentive to perform any of that work. As a tenant, you can either work your bum off to make somebody else's house really nice, or you can deal with the landlord up in your business from the day it lists to the day you move out.
I think if I had to do this in your place, I would compromise. Set aside a few weekend days for open houses; tell your tenants well in advance and ask them (maybe even incentivize them with a rent discount) to really go over the place carefully before those dates. Your lease most likely doesn't require them to be your personal cleaning service, so you are going to be relying on them more than you might like to. You'll still lose out on people who want to see the place outside of those dates, but at least you'll be able to exercise some control over how things go on those days.
Most leases have a whole section devoted to 'how things go if you list the house for sale while they are in it.' For example, real estate agents may have to give them 24 hours notice before they show the house. This is reasonable but also a huge detriment to selling the house, because you lose out on people just 'in the neighborhood' or coming down for the day to hunt for a place.
As for being the tenants, it's miserable because your landlord is suddenly obsessed with making the place as presentable and spotless as possible when previously they were probably only concerned that it wasn't on fire or a meth lab. Shoot, our house is going up for sale in a couple months and the only landlady I have is my wife, and THAT's going to be a pain since I work from home!
Selling a house -- or, rather, keeping a house in a condition where it can be sold quickly -- is tons of work. Tenants have no incentive to perform any of that work. As a tenant, you can either work your bum off to make somebody else's house really nice, or you can deal with the landlord up in your business from the day it lists to the day you move out.
I think if I had to do this in your place, I would compromise. Set aside a few weekend days for open houses; tell your tenants well in advance and ask them (maybe even incentivize them with a rent discount) to really go over the place carefully before those dates. Your lease most likely doesn't require them to be your personal cleaning service, so you are going to be relying on them more than you might like to. You'll still lose out on people who want to see the place outside of those dates, but at least you'll be able to exercise some control over how things go on those days.
Thanks!
There's nothing specific in the lease regarding if I sell it, but I would imagine my realtor and I would specify 24 hour notice and whatnot. I know that will forfeit any random people just wanting to check it out whenever, but that's part of the process.
I think I trust my tenants enough that they will keep the place clean for showings. It doesn't have to be spotless, but clean enough (and they are very clean people) should be fine.
Open houses are a good idea as well, thanks! I like the idea of incentives, whether it's a rent reduction or even getting them a gift certificate for lunch/dinner on that day, etc.
When the tenants weren't planning on renewing after Feb, they actually suggested that I should look into selling the place. So I think we will all kind of be on the same page. But again, I'm in research mode right now. Trying to have everything sorted out with options before we even have the discussions.
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