The Advantages And Disadvantages Of Selling Once The Tenant Has Vacated
If you’re considering selling your property after your tenant has vacated, it is important to carefully evaluate the advantages and disadvantages to make an informed decision. You should consider the benefits of a better presentation and flexibility, as well as the potential drawbacks like loss of rental income and a longer time on the market. You can optimize your selling strategy and make the best decision by weighing these pros and cons.
Advantages of Selling Once the Tenant Has Vacated:
- Selling a vacant property allows for a more accessible presentation, as it can be staged or prepared for open houses and inspections, enhancing its appeal to potential buyers.
- When there are no tenants, sellers can schedule more flexible inspections, renovations, and other sales preparations, resulting in a smoother, more efficient selling process.
- Potential buyers may offer higher prices for vacant properties, as they offer flexibility for immediate occupancy or renovation to buyers’ preferences.
- Avoid potential tenancy issues by selling a property with vacant possession, eliminating the risk of dealing with difficult tenants, potential disputes, or delays caused by lease agreements.
Disadvantages of Selling Once the Tenant Has Vacated:
- When a property owner decides to sell their rental property, they may experience a loss of rental income. This is because the property will be vacant and not generate any rental income while being prepared for sale. If the property remains on the market for an extended period, the loss of rental income could impact the owner’s cash flow.
- Maintaining vacant properties can be costly due to additional upkeep needs, which can eat into potential sales profits.
- A vacant property might take longer to sell than one that has tenants living in it. Potential buyers might perceive a vacant property as less attractive and be hesitant to buy it, fearing the risk of owning a property that has been unoccupied for a while.
- Properties with tenants may appeal more to buyers due to immediate rental income and less transition hassle. Selling a property without tenants can limit potential buyers.
Case Study: I recently sold a property that had been leased to two men. They were nice people who always paid their rent on time, but the living room had a fishing rod holder, and there were two dogs in the backyard, making the place clean but a bit untidy. The owners and I agreed it would be best to wait until the tenants vacated in four months before putting the house on the market. As the lease end date approached, we ensured everything was in place to get the property ready for sale. We did some touch-up paint, gardening, and furniture styling and took wonderful photos. Within a week, the house was listed on the market.
Since we’re aware of the financial strain on the investors funding the mortgage, we’re doing open homes twice a week and private showings as needed to get a sale as soon as possible. At the same time, we’re structuring the marketing strategy to maximize the investor’s sale price.
To sum up, selling a property after the tenant has moved out offers benefits like improved presentation and flexibility. However, it also has drawbacks such as loss of rental income and a potentially longer time on the market. Owners should carefully consider their circumstances and weigh these factors before deciding on the best approach to sell their investment property.