Sometimes people have to sell a Rental home, what are some of the things they should be prepared for?
1.First, with the recent Covid Pandemic, there were some Federal and State tenants rights in place that protected tenants from eviction for 30 days after failing to pay - in that the landlord had to give 30 day notice to quit or pay rent where as the state law is typically 10 days.
●Those moratoriums ended in for both Federal and State on August 25
●If a landlord has a tenant who is not performing they can go through the normal eviction process.
2. One of the top questions I get from landlords hoping to sell a rental is whether or not they should sell it with the tenant in place.
●Although most landlords do not prefer to have to pay the expenses of a property without having rental income…in most cases selling and showing a home with a tenant there does not go well and here is why:
○Tenants don’t want to leave therefore they are reluctant to allow showings and even more reluctant to have it look good during showings
○The tenant has a right to what the state calls “Quiet Enjoyment” of the property. So, if a landlord does NOT have a provision in the lease to allow for showings with a specific time from for notice of showings – you would have to get the lease modified or get permission from the tenant for each and every showing.
3. Condition issues are more likely with a tenant occupied properties:
●I met with a home seller last week that is selling their condo they had rented for a number of years.
○It was clear that the tenant had a pet, yet the tenant was not allowed to have a pet, based on the odor in the carpet.
○Some the repairs the tenant promised to do were not done.
○Basically, it had years of deferred maintenance that has to be addressed to command top dollar for the home but that is where we come in…..
4. Evaluate How Much it Will Cost to Remodel the Home:
●Buyers do not want to do any remodel work
●If you have a rental you should budget for updating when it’s time to sell.
●Most popular things buyers want:
○Fresh flooring
○Fresh appliances
○Updates in Kitchen
■Can be as simple as new appliances - $3000
■New formica counters - $2000
●Updated baths:
○Can be as simple as:
■Updated light fixtures
■Updated plumbing fixtures
○Be sure to check the tub and shower surround:
■Tired grout – can be refreshed fairly reasonably.
●Mechanical systems
○If furnace and Water heater are old consider providing a $500 home warranty if they are functional
○We just replaced our 22 year old water heaters and I wish I had them back. Each one costs $1500.
5. Present the home clean, repaired & empty is the best case
6. Pricing a home appropriate to its condition is CRITICAL
●This does NOT mean under pricing
●It means pricing AT market value without:
○Adding money for ‘negotiating room’
○Even as little as 1% can make the difference
●Buyers in this hot market will think twice about making an offer on an overpriced home because they are so used to being in bidding wars.
●They tend to move on to other homes that need less work.
What are some OTHER THINGS PEOPLE SHOULD CONSIDER WHEN SELLING AN INHERITED HOME?
7. Step 1 – Typically the tenant will clear out their stuff, however there ares always a thing or two to take care of.
8. I find, in most cases, Landscaping, Flooring and Bathrooms take the biggest cosmetic hit with tenant occupancies.
9. Improving these things will bring the biggest bang for the buck.
10. The average buyer spends less than 1 Minute viewing homes on line. Of the rooms they focus us are in this order of priority:
This gives you an idea on what spaces in a home are&
