Thursday, July 2, 2015

Should I list my vacant home or leave the tenant in place?

Should I list my home when its vacant or leave the tenant in place while selling?   The obvious answer to most sellers...Yes, leave the tenant in place!

I recently saw an unscientific poll that asked Realtors® this same question in the form of   "Which would you prefer to list a vacant house or a tenant occupied house?" 

Although I was not surprised the first twelve responses were ten to two in favor of vacant.

Why the different perspectives?

For sellers retaining rental income while selling just makes sense.  Sometimes, depending on the location, the presence of an occupant will serve as a deterrent to potential vandals or thieves.  Yes, sometimes thieves will steal components like air conditioners, garage door openers and appliances.  Sometimes, if well maintained and clean, a property will show better with furnishings instead of empty.

Finally, if the buyer is an investor, having a tenant in place saves the expense and vacancy while locating another tenant.  Seems like a win-win for buyer and seller.

For real estate agents having a tenant in place can lead to showing problems.   Sometimes tenants have pets that must be taken care of before strangers come inside.  Some tenants do not want anyone coming in while they are not present. 

Sometimes the tenants just do not want to cooperate for fear of having to move when a property sells.   I have even witnessed tenants "bad mouthing" the local schools, the property, the neighbors or whatever to attempt to discourage a prospective buyer.  [Suggestion:  Owners consider offering your tenant an incentive to cooperate such as bonus/rebate part of rent,etc.]

In Florida, real estate is sold subject to any existing lease.  I recommend tenants get a long term written lease initially and a written annual renewal when the lease expires.   Otherwise, a month to month tenancy could result in a lease cancellation upon sale or, at a minimum, an increase in rent.

So what is the best answer?  As usual, it depends.  It depends on the seller-tenant relationship.  It depends on the location.  It depends on the local market and composition.   Every property and circumstance is different.

If you are ready to buy or sell your Melbourne, Florida home, give me a call at 321-693-3850 if I can help in any way.