Time to enact your exit strategy on an income property as a part of your original investment strategy? Or have circumstances changed and it is now in your best interest to sell rather than hold your income property, read on to learn the best way to proceed. We help upgrade landlords to lenders; banks make easy money and we help you do that.
A lot of investors like to buy rental properties when the market is down and then when the market is up renovate those properties and then sell them. This is a great strategy in practice, but in the famous words of Mike Tyson, everyone has a plan until they get punched in the face. Sometimes owning a rental can feel a lot like getting punched in the face. If everything works out as planned then capitalizing at the right time in the market cycle to sell your rental property is a good move – did you know we can still pay you top dollar even if it is the top of the market and you are selling. Reach out and learn how.
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We will cover the top tips for selling your house in Deptford if you have tenants.
For your tenants this is more than a business transaction, it is their home, so treading lightly considering the emotions that may be stirred at the news is a wise path when you advise them of an impending sale and change of ownership. Especially if you have had your tenants in the property for a long time then you should really consider giving the tenants a heads up if you are going to sell the property – maybe they even want to buy the property from you.
That would sure make things easy for you if that is the case. We highly recommend not becoming the lenders for tenants, while it works great when you work with professional home buyers like us; we often hear horror stories of landlords selling properties to tenants.
It is important to be aware of their rights and the terms of the lease if you have tenants when you’re selling your house in Deptford. Unless the lease was written to allow for early termination, they have the right to remain in the home as tenants, until the end of the lease term. AKA even if you sell the property the tenants get to stay there – this can really limit the number of people who are interested in purchasing your property.
If on the other hand, you decide to wait until the lease expires then you can freely renovate the property and sell it for top dollar. This is a great strategy that we can highly recommend if you are thinking of selling your rental property in Deptford. Make sure that it will make sense for you to put all of that cash into your property before you begin any renovation of course.
This could be rather tricky, especially if your potential buyer wants an empty property, A misstep with how you handle your tenants could possibly land you in legal trouble. It is important to do things the right way when you are trying to sell a property with tenants in Deptford
Paying your tenants to sweeten a request to vacate the premises prior to the end of the lease is another tip for selling your house in Deptford if you have tenants. This is known as cash for keys, and basically, you are incentivizing the tenant to move out by paying them money once they have moved out. The terms are negotiable between you and your tenant so whatever incentivizes your tenants to move out and makes sense for you financially will determine how much you are willing to pay to get them out. It’s not uncommon to be anywhere from $250-1500 depending on the property.
If you find yourself in a position that exiting the property prior to your originally planned exit date becomes necessary, you may be able to pay the tenants to leave. This benefits you firstly because when the tenants vacate, you can make any updates or repairs before showings, empty housing statistically sells much faster and you are alleviated of any risk of legal fees for breaking the lease early. It is always much easier to get tenants to leave of their own free will by paying them a little bit of money rather than going thru the headaches of eviction court. This may end up costing more than it would have been just to pay your tenants to move out and it will definitely take longer to evict tenants than to do cash for keys.
Let’s face it, if your tenants would prefer the property not to sell and are emotional at the prospect of losing their home, lack of cooperation could make the process difficult. It can be insanely difficult to sell a property when tenants are not cooperating with the sale. If they make access difficult then your potential pool of buyers for the property just decreased again and that means that the sales prices also decreased. Think about it – if the tenants are giving you this much trouble now, why would potential new landlords expect anything else from this tenant in the future.
Rent to Own
Renting to own as an exit strategy makes for a longer period of time for a full exit, but may be well suited for those in a good financial position with reliable tenants. If you have built a good rapport over time, you could inquire as to any interest in a rent-to-own agreement, when you are selling your house in Deptford if you have tenants.
This is a great strategy to sell your property especially if you have reliable tenants that you can continue to trust. The issue with this strategy is that it is not actually a sale of the property. Basically, you are giving the tenant the right to purchase the property at whatever price you negotiate over whatever term you negotiate. Therefore, you will be selling the property whenever the tenant decides to actually execute the option and become the homeowner. In the meantime, you are still a landlord, but theoretically, the tenant is now responsible for more of the repairs. This may not always work out to be the case in practice, but at least on paper, the tenant is supposed to be responsible.
The next bonus is that this tenant is now a tenant-buyer once they have paid their option fee, which means that they are more like homeowners than renters. That is good news for you because they are more likely to take better care of the property if they have a mindset of ownership rather than renting.
Typically the tenants would become responsible for the property, as if it were already fully their own and the term is over a two-year period, to allow time for correcting any credit issues.
An option fee is typically made and because you are working with them, you may be able to set a higher price. Regrettably, higher profits come along with higher risks. One of which is common to most rent-to-own agreements, the tenant may decide at the end of the term not to buy and walk away, extending your exit strategy for an unknown length of time. As i said, this is not necessarily a sale of your property.
Selling Your House Directly
Do you have tenants? Are you ready to stop being a landlord now without any hassle? Want to know the best tip for selling your house in Deptford? Sell to Mike Buys Houses!
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Did you know that you could sell your rental to me for full market value and continue to get you mailbox money every single month AND make interest on your equity. I help landlords in Deptford upgrade from the landlord to the lender which means that they make money on their money without tenants.
Reach out to me and find out how I can buy your rental property in Deptford today.
Why wait for months or even years? You can stop worrying about your property 24 hours a day and leave the hassles of collecting rent behind. Mike Buys Houses buys property as is, so you’ll no longer be responsible for maintenance or repairs.
Mike Buys Houses buys homes with tenants in them just for this reason. Why not make it easy on yourself and your tenants? Call Mike Buys Houses at 267-984-4765 or send us a message to learn more about how we can help you.