Are you thinking of selling your tenanted property?
Selling a tenanted property can be tricky. Here are a few tips and things that can help you if your thinking of selling your investment property.
Check the lease term. For example if the tenant is under a one year lease and you're thinking of selling before that one year is up then that buyer will have to assume the tenant. Now that can be a turnoff for potential buyers. So it's really best to sell that property when the tenant is in a month to month scenario.
Communication. Sit down with the tenant and let them know that you are thinking of selling. Figure out the best days and times for showings. Give them heads up that they will be getting 24 hour notices. Ask them to keep the place tidy and I find communication is really the best way to approach this thing. Because letting the tenant know what's happening and being involved to a certain level will make things smoother when it comes to selling that specific property.
Proper notice. Keep in mind that if a buyer intends to move into that property for their personal usage or have a direct family member move in then the N12 form has to be issued with 60 days notice. So keep that in mind when determining the closing date in the negotiation process.
Overall it is a little more tricky selling a tenanted property because you can't stage it properly. There's certain things you can't do and you have to work along with the tenant to accommodate their needs and wants in that selling process. Here are two tips to help you sell a tenanted property.
1. Take professional pictures when tenants move in and move out. So when a tenant moves out, usually there's a day where one moves out and the second one is moving in. You can have professional photographer take pictures of the property which you can use when you decide to sell it down the line.
2. The second thing is consider a vacant possession. So again this is where you sit down with the tenant and say "Hey you know, I am thinking of selling the place. I want to work with you to help you find a place. Give you appropriate time." Work that out. Maybe consider giving them some compensation to help them move out. But again, approaching it collaboratively with that tenant will make things easier. Because at the end of the day having a vacant possession or property that is properly staged will show best for potential buyers and will help you achieve the top dollar you are looking for as an investor when selling that specific property.
Work with the tenant and help them transition to their next place and again consider compensation to help them move out and find the next place.