Home Selling in Milwaukee>Question Details

Sarah, Home Seller in Milwaukee, WI

I am looking to sell one of my 2 duplexes over the next year. I need to keep rental income coming in so I

Asked by Sarah, Milwaukee, WI Thu Aug 28, 2008

would like to keep renting the units out (I live in 1 unit, the 3 others have tenants), however, I cannot control the staging and appearance of the other units...likewise, how would you suggest I handle selling with tenants in the property. Thanks for your time.

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I believe that you may have better results tailoring the buyer to the situation rather than tailoring the situation to the buyer.

People like me prefer a fully rented unstaged investment property over a fully staged empty property. Anything that effectively lowers the risk in a business that is synonymous with the word risk is stellar work.

I have liked your posts so I have been reading back through your older ones like this....

Raymond K Roberts
0 votes Thank Flag Link Wed Dec 3, 2008
Sarah,

I agree with everything Ms Thompson has to say....in addition, have you considered giving your tenants a small incentive to be cooperative? I don't know what your relationship is with the tenants, however, I know with my own I often will offer a small reduction in rent for the inconvenience in showing the unit. If they benefit, they may be more cooperative in keeping things clean. Also listen to their concerns, are they scared of rent increases, or the unknown new landlord...perhaps offer a new lease agreement to protect them, and they will be more accomadating.
0 votes Thank Flag Link Wed Nov 19, 2008
Sarah,
When you are selling investment property the buyers are aware that the owner is not living there. With the one that you are in. I would suggest that you have them show your unit first. If they have interest then have them show the other unit in your building. The other unit I would find the tenant that is most likely to help you in showing the property. Have them show that unit first. It is good for a buyer to see the units are bring in money. As far a staging a home it is more important on rental units that the outside of the building is in good condition and the building is in good condition. Buyers are aware that tenants might not pick things up or leave dishes in the sink. Selling investment property is far different then selling your own home. Buyers will look for positive cash flow, maintance and profit and loss.
0 votes Thank Flag Link Wed Sep 10, 2008
Sarah
I do not work in Wisconsin (although I was born in Madison...my grandfather was Phil LaFollette)

You have some great posts so far. In California there are a couple of principles that should help you.
First, the value of a rental property is the cash flow it generates. So it is in the best interest of the buyers to have the tenants remain. There may indeed be landlord tenant laws that REQUIRE them to remain, I don't know Milwaukie law.

Second, it is common in the sale of income property for the "showing instructions to read "inspection upon accepted offer". So unlike a residential sale, buyers are not allowed to inspect the property BEFORE they submit an offer. What a terrible inconvenience to the tenants.

So don't worry about the staging. Health and safety issues are one thing, staging is another.

Third, because the income flow is related to the value, at some point during the sales process you are required to provide financial statements. Part of that is a Rent Roll. In California the tenants are asked to certify the amount of their rents. So the buyer has an objective record of the rents being paid.

My recommendation is that you interview three Realtors and discuss your concerns about selling. Select the one you think can meet your needs.

Good luck!
0 votes Thank Flag Link Thu Aug 28, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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Hi Sarah

I have a listing that has the same issue. Do your tenants have month-to-month or longer term leases? Long term leases will stay in effect even after you sell.

First, I would be very upfront with your tenants about your need to sell. Reassure them that they will have plenty of notice if you do accept an offer. Also, make sure you account for proper notice when agreeing on a closing date in the Offer To Purchase. When setting up showings, I would ask for 48 hour notice. You then have a little time to inspect your units before the showings and make sure everything is OK. Thinking out of the box, maybe you could offer the tenants a little bonus if they keep the units extra clean.

Please feel free to contact me directly if you have more questions at 262-354-1186.

Good luck!
0 votes Thank Flag Link Thu Aug 28, 2008
Sarah, I appreciate your situation. I have worked with many sellers who have faced a similar situation. Quite frankly, there is no easy answer. Generally, tenants would prefer not having to find another place to live after a dwelling closes, and therefore, will find ways to not have the sale occur. One of the ways in which they achieve this is by not cooperating with showings or not keeping the place clean and orderly for showings. What has worked in the past is to offer the tenants consideration in return for their full support and cooperation. Some investors have found offering reduced rent will increase the likelihood of cooperative tenants. Also, I would not hide the fact that you are trying to sell your duplex from your tenants. Eventually they will find out and it is better if you are upfront and honest with them - specifying that your goal is to sell and that you expect full cooperation. In return for the tenant's cooperation, I would offer some incentive or consideration for the inconveniences of showings and/or open house appointments. You're most likely will not be successful without the support of your tenants. I hope this helps. Good luck.
0 votes Thank Flag Link Thu Aug 28, 2008
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