2 TENANTS If you have tenants in place, they can complicate the process and make it difficult to sell when you want. Lawrence A. Stein, a Chicago-ar- ea attorney, recommends having an attorney review your lease and your circumstances whenever there’s a tenant involved. Stein says that if you plan to sell the home to someone who will occupy it (versus selling to another investor), you usually need to honor your lease. If the lease doesn’t expire for a while, you may be able to buy the tenants out of the lease. Again, consult an attorney to help
1 YOU’VE HELD a property for years, and now, for one reason or another, you’re thinking it might be time to sell. Rushing into a sale, though, can be a costly mistake. Before you stick a “For Sale” sign in the front yard, consider these seven elements that can influence the profitability of your sale. MARKET CONDITIONS Timing is everything. Sell when the market is depressed or your property is in distress, and you could lose a substan- tial amount of your investment. On the other hand, if properties in the area are in high demand, it may be a great time
4 into his space, looking at his things. He may even need to take time off work to be available to a photographer, various inspectors and repair and maintenance workers. It can have a huge impact on his life, so his cooperation is essential, according to Brad Chandler, founder of Express Homebuyers USA. “If you are going to market a home with the tenants, you need to consider how accommodating the tenant will be,” he says. “An uncooperative tenant can make it very difficult for a landlord to show the property to potential buyers.” THE BUYER Whether you intend to sell to another investor or to someone who wants to purchase it for his own enjoyment will influence your dealings with your ten- ants, how much money (if any) you put into renovating the property, and how you market, just to name a few things. Stein says that if you intend to sell to another investor, you actually want to put the property on the market when you have a good tenant with a good history of paying the rent on time. The tenant then becomes an asset that helps market your home to other investors. He adds that since the lease usually supersedes the sale unless specified oth- erwise, you have minimal obligations to the tenant other than advising him of any showings and telling him where to send the rent check after the sale. However, if you intend to sell to a homeowner, Stein recommends waiting for the lease to end. The buyer also figures into how you market. The typical homebuyer probably will be looking for properties on the MLS and maybe Craigslist. With investors, you have a few other options. You may forgo the MLS and advertise, instead, through your local real estate investors association or through networking. REPAIRS Depending on the condition of the property and whether you plan to sell to an investor, you may decide to sell as-is.
IF YOU'RE GOING TO MARKET A HOME WITH THE TENANTS, YOU NEED TO CONSIDER HOW ACCOMMODATING THE TENANT WILL BE.
in the process. Another option, regardless of when the lease expires, is to let the tenants know you want to sell and offer them the opportunity to purchase it. (In some cities, like Washington D.C., you may be required by law to do this anyway. Landlords who don’t adhere to the
to sell. Also, consider the rental market. Have rent rates dropped, resulting in a negative cash flow, or is the market strong, like it is right now in many com- munities throughout the country? But it’s not always as simple as that. There could be any number of reasons why you’re thinking about selling: You think you can make a profit, you’re tired of being a landlord, or you want to buy another property. Maybe you have more personal reasons, like needing to pay medical bills. In the end, you have to weigh the market conditions versus your personal needs. “The reasons why you might want to sell can be almost endless,” says Ryan Paliukaitis with Real Estate Solution Providers, adding that because you have a personal need doesn’t necessar- ily make it a good time to sell. “If it’s during a market crash, it’s a terrible time to sell, even though you’d like to.”
3 5 Tenant Opportunity to Purchase Act in the nation’s capital face stiff penalties.) Of course, the tenants may panic when you mention selling and react by break- ing their lease and leaving you holding the bag. Some very upset tenants may even damage your property. THE COOPERATION FACTOR Putting your property on the mar- ket impacts your tenant’s life on many levels. Ideally, he will be making an effort to keep the home clean and ready for showings on a daily basis. At the very least, strangers will be walking
thinkrealty . com / mag | 115
Made with FlippingBook Online document