As more and more people are investing in real estate, a question I’m often asked is, “Should I wait for my tenants to move out before selling?”
Yesterday I was showing condominium units to a young man relocating to Waterloo Region. He just wants a small condo in a new building. It was our second time out and since winter is upon us he’s added heated underground parking to the wish list – that’s the great thing about real estate, as you visit properties, what you are looking for becomes more clear.
What he’s looking for is very attainable in Waterloo Region.
One of the units we couldn’t see the first time out as our showing request (more than 24 hours prior) was not answered until we were actually on site to see another unit in the building. We were there at 11am.
“Can you come back after 3pm, the tenants didn’t get back to me in time”.
“We are here now”.
“Can you rebook for another day? Try to make it after 3pm, OK”?
Normally, I wouldn’t rebook. The seller is breaking one of the first rules of real estate (see book – 365 Rules about Real Estate), but my client liked the unit we had already seen in the building and the building itself so we rebooked.
We got to the building after 3pm. I’m pretty sure the people hanging around in the lobby were the tenants of the unit we were about to see.
As soon as we got out of the elevator, I heard the dogs barking. There were three of them, five or six pounds each. They did not stop barking the whole time we were in the unit. They jumped up on us and nipped at our ankles and coats. They had ruined the bedroom carpet and door trim, and the living room laminate flooring. The place was also a mess with dishes, pots and pans all over the kitchen and sex toys laying about in the bedroom.
Should I wait for my tenants to move our before selling? Yes.
Should I wait for my tenants to move out before selling?
No.
Last year I was working with an investor. He bought a duplex on Regina Street near Wilfrid Laurier University. It has two units of four bedrooms each. Most importantly for him was that it had tenants with leases in place. As a student rental, securing financing is easier if the dwelling has tenants. For the investor, having leases in place mitigates some of the risk. He is not starting at zero. It is rented. The investment has cash flow from day one.
Here’s your answer
For the investor, it is mostly about money. Instant cash flow is more important than the state of the place. They want tenants and good leases.
For the homeowner, it’s always about emotion. Can they see themselves happily living there? If your tenants are jeopardizing your sale, wait for them to leave and then sell.
One of the foundations of real estate marketing is “Who is my buyer”? Think about that and you will have your answer.
