The coronavirus pandemic has brought a lot of hardship to many families all over the world. But whether you lost your job in the last year or not, it’s likely that you’ve started exploring new ways to make money.
If investing in a rental property was one of them, then you’ve come to the right place. There are a lot of great directions to go in when purchasing an investment property — but if you’re looking to get more information on how you can sell your space while still keeping more money in your pocket, look no further.
Ahead find a handful of important tips and questions you should be aware of before diving into selling a tenant-occupied property.
You can sell your property with tenants in place
Bob Pinnegar, President & CEO of the National Apartment Association, told The Post that actually having people living in the house or apartment you are trying to sell “increases the value [of your property] because there is existing cash flow.”
“Typically, the rental agreement will have specified reasons the unit can be entered with notice; this will allow for showings to occur and outlines when and under what conditions they may happen,” Pinnegar explained.
“An experienced broker can help navigate the process and provide advice. It’s also important to note that, for larger properties, there isn’t necessarily a traditional showing. Instead, inspections are conducted during the purchase process that look at the condition of individual units and the building in its entirety.”
No matter what, Pinnegar recommends that both sellers and buyers should ask advice of an experienced local broker and consider the desired use for the property and proceed accordingly.
“While you can always speak with a broker to negotiate a lower commission rate, keep in mind that the seller’s agent will almost always expect a full commission,” Pinnegar explained to The Post.
“Further, simply because a broker offers you a better discount doesn’t mean that they’re your best representative – you want a trusted, established and connected broker who knows how to close deals, not necessarily one that offers a large discount.”
When is it not a good idea to sell a property that is currently occupied?
While there are tons of awesome benefits to selling a tenant-occupied property, according to Pinnegar, it’s not always a good idea.
“Often, selling an occupied property to someone who intends to keep it as a rental can increase the property value as it ensures continued cash flow for the new buyer. If you’re selling to someone who intends to occupy the property themselves, however, you might not get as much as the property is worth,” Pinnegar said.
How will selling an occupied property impact the residents and how should you communicate with your residents if you’re looking to sell?
All of these questions are important to be aware of when going this route. “Selling a property that is currently occupied means that you need to be upfront and proactively communicate with your resident,” Pinnegar said.
“Assure them that their existing rental agreement will remain in place beyond the sale and let them know that, at some point, there may be a notice of entry for a final tour or inspection of the property.”
(New York Post)
