Selling house, better to have renter or not?
I own a house (single family detached home) in an area where about 25% of the houses are rented either partially or fully.
If I want to sell the house would it be better to have a renter or not?
Having a renter would potentially make the house more attractive to someone who wanted to buy the house as a rental unit.
On the other hand if a owner-occupier wanted to buy it then the renter might be considered a nuisance.
Also, when showing the house the renter would be there, so it would not show as well.
What is the common wisdom about this?
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Let's look at the potential outcomes -
With tenant - The buyer wants to live in the house. Buyer needs to wait until the lease expires, or if tenant is monthly, evict the tenant. This can be off-putting to a buyer. Or - it's an investor - If the tenant has been well vetted, a good history of payments, etc, this can be a good thing. I am an agent, and work for a landlord with 100+ 2-4 unit buildings. The typical purchase has been an empty building in need of renovation. In the few cases where it's come occupied, we have always had a series of evictions required. If things were going well, the owner would tend to keep the building. Of course this is just my experience.
No tenant - easy to show, and flexible on who buys it. But you have carrying costs until it sells. This can be very costly if it takes a while to sell. I know this from my own property recently sold.
Just brainstorming here:
You might be able to get the best of both by forming a list of interested renters, and telling them that the house won't be available until some time in the future. (Say 2-3 months from now.) That way if your buyer is an investor your home is more attractive due to the interest list of (vetted) renters. Obviously if the home is purchased by someone wishing to live there then no harm is done.
Another thing you could consider (and note I just completely made this up so I don't even know if it's legal, though I can't think of a reason it wouldn't be): If you feel you are good at finding and vetting renters, and if the home is purchased by an investor, you could make a deal with them that you will find them their first tenant. If that isn't enough for them, you could consider even offering to pay them X per month (after closing) until you do. X in this case should be as low as you can get them to agree to. Maybe 1/2 the normal rent would be fair, but you should make sure to include a stop limit; perhaps you are only on the hook for 3-6 months.
Or, you could turn it around and go the other way. You can offer to find the investor their first tenant for a fee equal to 1 month's rent.
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