If you think it’s a hassle to sell your own property consider how a tenant views it. Inconvenience followed by possible eviction. Little wonder that when selling rental property it can present so poorly. However the only thing that prevents this outcome is personal pride. Here’s how you can do it better.
When selling rental property, you or your property manager needs to sit down face to face with the tenant and discuss the whole situation. You have to be honest and upfront with them.
If the rental property is going to sell to an owner-occupier (being someone who will live in the place themselves), they need to understand this and have the opportunity to get prepared. You should explain the period of time they will have after the sale to move, and tell them that you will provide a reference attesting their cooperation. However, if it is a normal rental property chances are quite high that another investor will buy it. In this case it is in their interest to present the property well and it is likely they could stay. Promise to keep them informed during the sale process. This helps to reduce their anxiety.
Set some parameters around inspections. This includes when the real estate agent can bring buyers through and the extent of the campaign. Inspections should mostly be open house to minimise inconvenience, and the times agreed in advance. Other inspections should be strictly by prior agreement with at least 24 hours notice. You must state that no one will go through except as agreed and always accompanied by the real estate agent. The marketing campaign should have a reasonable time limit for instance, 4 weeks, after which you would come back to the tenants if necessary.
Discuss how you like the rental property presented but be reasonable about it. You have a right to expect neatness but not paranoid cleanliness. This means beds made, dishes put away and floors vacuumed. In return offer an incentive to be paid at the end of the inspection period. This is not a payoff, but recognition of the inconvenience to which you are putting them through. One or two weeks rent free could be appropriate. It is also a good idea to suggest that you will provide fresh flowers and perhaps a cleaner while the rental property is being shown. Obviously this nice for the tenants but also in your best interest.
Of course sometimes a tenant is uncooperative or irredeemably messy, or has horrible furniture and you have to make a judgement call whether to sell with them in possession. If it is unavoidable you simply have to do the best you can. Remember that a really difficult tenant can make it almost impossible to sell at a good price, and tenancy laws do very little to help. Fortunately this is rare. Most of the problems are caused by the tenant being taken for granted.
Don’t forget to ask them if they would like to buy. You just never know.
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