• Listing and Selling A Tenanted Property

  • So for whatever reason, you’ve decided that it’s time to sell your Florida investment property, or perhaps you’re just thinking about it and you’re looking for some advice from your Realtor. It doesn’t have to be in Florida, it could be anywhere.

    “Is now a good time?” If I had a penny for every time I got asked that question…

    Well, like any good attorney would respond, “It depends.” But here’s my two cents after more than a decade as a Realtor, and as a property manager.

    The are many reasons to sell (a sellers’ market is one of them) but if you have to sell, then you have to sell, regardless of the consequences. Sometimes life happens that way. But if you want it sold in 15 days, then in a normal market, you can expect a lower price.

    Recently, I had a good client who wanted his unit sold “yesterday” AND for the best price. Well, at the time of writing, our market just doesn’t work that way. If only making money were that easy. “Well try anyway,” he said. “It doesn’t hurt to try, right?” Well it does hurt, it hurts me because when a real estate agent takes on the burden of marketing a property that doesn’t sell, we don’t get paid. Experienced agents know to walk away from offers like this to “test the market.”

    Here’s another reason a Realtor might not want to take on the sale of your property. It’s tenanted, meaning that it’s rented and there’s a lawful lease in place. Again, a seller and a real estate agent may not necessarily see eye to eye when it comes to listing a home like this. From the owners point of view, I should be screaming for the business, right? The owner above told me: “The economy down there must be getting pretty good if the real estate agents aren’t willing to at least take a chance on selling a $100k property. Up here you would have 10 agents begging to list this property!”

    He wasn’t trying be difficult, he just isn’t in the real estate business. And like many of our owners, he also lives in another country. Sure, you could still find a dozen, inexperienced agents begging for a shot at selling any no-hoper, but an experienced Realtor will recognize that there’s a possible risk-reward issue here. Here’s the issue when it comes to managed properties:

    It may seem surprising, but the idea of letting a steady stream of lookie-loos through their home when their lease permits “quiet enjoyment” of the property, isn’t appealing to most tenants. Our last unit had over 50 viewings before we finally got an offer. That’s FIFTY. As if that isn’t off putting enough to a tenant, why would any tenant want to slit their own throat? What if the new owner wants them out and won’t renew their lease? There’s nothing in it for the tenant when it comes to co-operating.

    When I was less experienced, I’d try anyway because my clients would beg me, and I was keep to please. But it nearly always ended in tears. Most decent tenants will co-operate for about a week, maybe two, but soon get very unco-operative when the home doesn’t sell to the first person who walks through the door. Last year, I had a tenant tell me that he had a gun and wouldn’t hesitate to use it to “protect his family” if one more agent came through his door, regardless of what his lease said about allowing “showings.”

    It was then that I swore I’d never list another occupied unit. It’s a massive headache, a liability, and usually a wasted exercise when the listing eventually turns “expired.” The agent not only gets the blame and looks bad in front of their client, but they don’t even get paid. I learned that the hard way, just like everyone else who survives in this business.

    “Go ahead – Make my day!” Remember guns are legal here in the U.S. and Florida has strong “Stand your ground” protections.

     

    Here’s another problem that is perhaps more specific to Orlando and Florida in general. Realtors that are showing clients in Florida are often showing investors who are here on vacation. They want to see a bunch of units as quickly as possible, preferably empty units on lockboxes that they can see at the drop of the hat. They want to run the numbers on each and put in offers on the best ones. Some international, or out-of-state cash buyers are only in town for a day or so (perhaps you were one of these) and they don’t have time to come back in 2 days when the tenant finally answers his phone and says “Ok, it’s convenient now.” The car pool just moves on to a vacant unit that has a nice, easy lockbox on the door. That’s just how it works here.

    Consider also how a unit shows with a messy tenant in place, who hasn’t cleaned up in days, compared with a vacant unit with nice clean carpet and freshly painted walls. Which home will fetch the best price?

    So those are my thoughts. I’m not saying it can’t be done. If you have to sell, you have to sell. And we can help. I just want my clients to understand the realities before they tell me from half way across the country (or planet) “Just list it.” Unless the market is booming,  you’ll likely be doing yourself, and your agent a big favor if you can wait until the lease is over. You know how time flies!

    For more information, on buying and selling investment homes in the Orlando area, call Condo Metropolis on (407) 394-4628.