Should I sell my Edmonton investment property while tenants are still living there?

This is a really common question that I come across working as a Realtor in the city of Edmonton. The best way that I can give my two cents on the topic is by imagining the situation from everybody's perspective that is involved.

The tenant.

Put yourself in a tenant’s shoes for a second. If you are the owner and you yourself haven’t rented in some time, or maybe even ever, it is easy to forget what they are going through when the house that they are living in is put up for sale. All of a sudden these tenants have photos of their home online, people are coming by for showings and interrupting their schedule, and their belongings are out for everyone to see. And let’s not forget that these tenants don’t really have anything to gain from a sale of the home, in fact sometimes it may mean that their lease may come to an end sooner than they’d like. (Depending on the terms of their lease)

So what is the motivation for a tenant to accommodate showings and keep the place clean while the home is for sale? The tenant can leave a good impression on potential buyers hoping that the new owner would keep them as a tenant, but this only applies if the buyers end up being investors.

You the seller.

Now if you’re the one trying to sell the property, imagine this. You go through the process of listing your house with a real estate agent, but once your home is listed you feel underwhelmed. I’ve seen it many times where a beautiful home isn’t marketed as well as it could be because the tenants keep it messy. Clutter and dust do not sell houses. And if potential buyers do still come for a viewing it is not uncommon for tenants to stick around during the showing, or sometimes I’ve even had tenants refuse showings all together for various reasons. We’re talking about selling a piece of real estate that is worth hundreds of thousands of dollars. You want to ensure that it is showing its absolute best and that any showing requests are accommodated - that is how you get top dollar. However typically that won’t be the case if you have tenants in the property that don’t have the same motivation as you the seller.

Potential buyers.

Imagine you are the one searching for a home. There's a good chance that the potential buyers won’t be another investor, it could be first time home buyers or empty nesters looking to downsize - you never know. What do people want to see when viewing their new potential home? Somewhere clean and comfortable that meets their needs. If the home is dirty because of the tenants, that may be enough to turn a buyer off. Not to mention people want to envision themselves living there, if it is a mess and feels like someone else's place it becomes harder to do that. And what if the tenant stays in the home while the buyer’s agent tours their clients through the house. That is an uncomfortable situation for the buyers and the chances of them liking the property decrease significantly. Finally imagine the potential buyers got a babysitter for a nice Saturday afternoon to go view some potential homes. Then when they get to your property the tenants are still home, and they claim they weren’t notified therefore they won't allow a showing. The buyer’s agent booked the showing with adequate notice, the buyers went through the trouble of getting that babysitter, and then didn’t even get to see the property. Do you think these potential buyers will be back? I doubt it.

Conclusion.

Please understand that I’m not bashing tenants by any means, there are many amazing tenants out there! And I have seen lots of properties sell while they were being rented by fantastic tenants. However I bring this up for someone considering selling their property, there are a few questions to ask yourself. Would your property show significantly better if it was vacant and nicely staged? Would the photos look way better without tenants in the property? Would it be easier to show potential buyers? And could you offer a much more appealing possession date?

These are all great questions to ask when thinking about selling; however I realize there may be other factors to consider. Would you be able to hold the property if it was vacant and you weren’t collecting rent? What happens if the home didn’t sell?

Everyone’s situation is very different and I completely respect that; It is not an easy decision. Planning things out well in advance can result in a much smoother experience when it is time to sell. If you have any questions or would like to consult with me about a situation you’ve got regarding selling your property, please reach out! That is what I'm here for and I'd be happy to help!