Should An Owner Keep Rental Property Vacant or
Tenant Occupied During the Listing Period?
This has been hotly debated for many years; whether to leave your rental
property rented out to others or have the unit vacated during the listing
period. You've decided to sell your investment property; a single family
condominium, townhouse, or home and you don't know whether to leave it empty or
keep it rented.
With over 30 years of experience in this area, being a licensed real
estate broker, it is my experience, leaving the property rented to others is the
best a real estate broker can do to help his seller. I have found, that, most
realtors prefer to have a vacant listing, as it is much easier to show, causing
little in way of inconvenience, not only to the listing office, but to any
realtor wanting to show the property to a prospective buyer. I will repeat, "it
is convenient to the agents"; it is not in the best interest of the seller.
First, when a property is "for sale" and it is vacant, you are risking
the possibility of vandalism. I have seen and heard of many listings being the
victim of vandalism while under the care of a listing broker. Also, the sellers
entire investment is "empty" and generating no income; and while this may seem
like a reasonably good idea at the start, it becomes quite burdensome after
months of "no activity" while being listed on the market.
As a licensed broker for nearly 30 years, I would prefer a vacant
listing, but I would also like to do what is best for my client. The best you
can do for your seller is to generate as much income as you can while preserving
the property and making the listing available to realtors with little or no
inconvenience.
Here is what I have found to be a solution: a lengthy conversation with
the tenant, discussing the wishes and desires of the owner to market and sell
the property with the tenants occupying the unit. Letting the tenants know the
owner requires their complete cooperation during the listing period and making
the unit available 24/7. For this inconvenience, an addendum to the lease
agreement is drafted and the tenant is given a 20% discount on his/her rent.
They are to pay their rent on time as usual, and to pay the usual amount,
however, 20% of the rent amount is placed into his/her deposit account each
month. This will reward the tenant for cooperating fully and assure them of
getting this reward only after they successfully vacate the unit after the close
of escrow. A 20% discount is an aggressive discount and finds favor with most
tenants and with the understanding that this discount is given in advance for
their complete cooperation, a successful marketing plan to list and sell the
property is increased. The property is to be, not only available, but kept clean
at all times. Your tenant becomes your partner in a sense. I have successfully
managed 100's of these special situations in my 30 years of managing real
estate. It first became useful in the early 80's while many lending institutions
were compiling foreclosures at record levels. I was in charge of their REO "real
estate owned" department and was able to help carry their inventory while
disposing of each and every foreclosure utilizing this strategy. While it is
hard work, it is the best thing you can do for your seller.
There are many reputable management companies available with this
experience and training; many listed with the better business bureau, local
chamber of commerce, members of the ethical internet association, etc. and
practicing realtors. Interview as many reputable management companies as
possible and ask your realtor for referrals.
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