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My broker and I had a long talk at the listing meeting re whether to leave the tenants in or make them move out during the marketing of the house.
Pros: the property is looked after while it's being shown; I'm still collecting income; I won't have to rip out a back stairway to the yard below that provides an easy access for vandals; the homeowners insurance will stay in effect; furniture provides a staging tool.
Cons: the tenants (daughter and elder mother) pay rent faithfully but have a lot of clutter--will they agree to box the clutter and store it; can't fix up interior to maximum potential, so it won't show as well. I'll have to refund a substantial amount of money to make it worth the tenants' trouble to stay while it's being fixed up and shown.
If I was a rental tenant living in a house for sale, I wouldnt make much effort to make the house presentable for a showing, because A-I am not benefiting from the sale, and B-if the house sold, I'd have to look for another place to live.
Just a thought.
One factor that could be HUGE is when is the tenants lease up and what is the time to market the property...
If the tenants lease expires NOW and you don't think the place will find a buyer until the spring that is very different than having the place occupied until late March or so...
For a single family home it is pretty much always going to show better with out a tenant.
If I was a rental tenant living in a house for sale, I wouldnt make much effort to make the house presentable for a showing, because A-I am not benefiting from the sale, and B-if the house sold, I'd have to look for another place to live.
Just a thought.
That's why at the start I have to offer enough money to them at the end of their residency to make it worth their while to fully cooperate.
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One factor that could be HUGE is when is the tenants lease up and what is the time to market the property...
They are not on a lease; they are on month-to-month so a 60-notice hopefully that ends at close of escrow will suffice. Hypothetically, I say to them, "I will give you $5,000 if you will always keep the property presentable, cooperate with allowing it to be shown, and will exit on time at the close of the 60-day escrow." Does this sound logical? Reasonable? Doable? Would tenants generally be foolish enough to turn down $5,000 just to spite the owner, who had no choice but to sell in the face of a tight situation?
How many showing appointments are the tenants going to decline because they're not convenient for them?
Many landlords offer something like $1000 to the tenant if the house goes under contract while they're living there within so much time. That motivates the tenants to keep it clean and allow buyers in.
How many showing appointments are the tenants going to decline because they're not convenient for them?
Many landlords offer something like $1000 to the tenant if the house goes under contract while they're living there within so much time. That motivates the tenants to keep it clean and allow buyers in.
Otherwise, get them out and show the house empty.
Nowdays, $1,000 is hardly enough to get them to return your call, much less go through a barrage of showings and clean up their clutter. They've been good tenants over some 15 years, never missed a rent payment, never damaged the property. Besides, looming in the back of my mind is an uninsured vacant house just ripe for vandalism or worse.
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Originally Posted by jdm2008
Like the poster above says, maybe offer some money like 1k or 2k(or whatever you want, 5k is alot though) if it sells within x time period and then less if it sells in x+however many months. Contigent on them vacating with no damage etc.
Yes, some scheduled payout, sliding-scale type of arrangement is probably the most feasible arrangement. I don't begrudge them the 5k and the reality today is it costs more money than in the past to get a tenant to fully cooperate with you.
Part of the answer will depend on if you are going to market it as a rental property or not. If I am looking for a house to live in I usually will not bother with one that is a rental with a tenant.
Agree with Racelady88. An investor looking for a rental property will likely want the tenants to remain if they are paying a competitive rental rate so they don't have to waste time finding new tenants. Otherwise, it's very difficult to show rentals with tenants. Around here we have to give at least 2 days notice before showing assuming we can get the tenant to cooperate. Buyers also don't want to deal with evicting tenants after purchasing if their lease runs beyond the closing date.
Part of the answer will depend on if you are going to market it as a rental property or not. If I am looking for a house to live in I usually will not bother with one that is a rental with a tenant.
We'll definitely market it as a "family" house to be occupied by the buyers. That's where its charm lies--gorgeous view of the nearly hills and cityscape, nice protected backyard for children, lots of space along the front and sides for a garden (rare for a hillside property), lemon and avocado trees. That makes it more difficult, I know, letting the tenants stay in there but the trick will be to "buy" the current tenants' cooperation as much as we can. Let's face it, money often can be a powerful motivator, especially for a single mom trying to put two daughters through university. PS There is no lease;month-to-month.
thrillobyte, i didnt realize you've known your tenants a long time. I would think they'd be more cooperative, especially with some cash. good luck!
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PS There is no lease;month-to-month.
