Do you list your rental properties while they're still occupied? Should you? Listen in to find out why this may not be the best way to save you money during a turnover.
Hey guys, this is Judy. I'm with Navigate.Company. I've managed over $500 million in real estate transactions.
I have processed over 15,000 applications and my team has placed over 5,000 tenants throughout my career. Today, I'm going to go over three reasons why we do not recommend listing a property for lease while it's still occupied. Trust me, we've learned it the hard way. And the good news, the things I'm going to share with you are tried and true.
I know that Sounds great to be able to list your property while the old tenants are moving out and snatch a new tenant, get that new lease signed, have minimum days where you're not collecting rent. But there are some legitimate reasons to seriously consider regarding listing your property for lease while it's still occupied and most importantly, before it is move in ready again. So the first thing we're going to be talking about is liability.
As an individual landlord, as a property manager, as a property management company, or even as a listing agent, you always want to keep the risks in mind and at the top of your list when it comes to considerations. What are the potential liabilities of listing your property before it's completely vacant? First one that I think of is, let's say somebody walked through the house, they love it, they sign a lease to start on the 8th of the month after your tenant moves out on the 31st from the month before. What happens if your previous tenant actually doesn't move out? They hold over.
What happens if your tenants move out and there's some serious damage that happens to the home in the process of the move out? Now you're stuck with a lease that you can't honor or a situation with a new tenant that's already off on a sour foot. Lots of different things that could happen when you have a lease signed before the current tenants have already moved out and you don't really know the full condition of the home. The other aspect of liability that you have to consider is that you're going to have people walking through the home with your current tenants already living there. There's always the chance that something could go missing.
Tenants could lose something in the process of moving, right? Like there's a lot of upheaval going on. You don't want to get blamed for something going missing or something being broken. And your tenants don't want to feel like their moving process is impeded because you're showing the property. Remember, your goal as a landlord is to get those tenants moved out, get your property turned over, and present it again in an excellent way to potential new tenants.
To wrap up point number one, liability. You have lease considerations and liability to consider both from your current lease and your potentially new lease. And then you also have liability when it comes to the people in and out of the property, making sure that everyone is safe and that move out process goes well. The second thing that you want to consider always when you have a property listed for lease is that listing and leasing presentation. Your property's condition is going to establish what type of tenant you are attracting.
Even the most organized, cleanly, amazing people, when they're going through a move, everything gets turned upside down. And it can be unfair to expect tenants. who are moving to try to keep everything in just the right places so that it is show ready at any given time one of the things that i often hear is well can we just do open houses like on a saturday maybe we could ask the tenants to open it up you can try but the reality is you're dealing with real people who are really moving to expect individuals to keep a home in a condition that is attractive to potential new tenants can be difficult You want to keep this process as easy as possible for the current tenants so they're able to leave the home easily with minimal damage or even wear and tear. And to make that property as easy as possible for your team to get in and do a make ready so that it is move in ready again and ready to present to your new potential tenants.
And then finally, the third thing that I always talk about is your market competition. You never want to put your property in a position to be at the bottom of the pile. So if you're looking at listings online and you're looking at other listings in your neighborhood and you notice that all of these properties are move-in ready, like turned over, paint patchwork has already been done, you can walk through, you can smell the clean, the fresh, and then your property is going to be being shown in upheaval, hasn't been cleaned for a couple weeks because we're moving. Sorry guys, hope it looks okay.
We can't quite, you know, you see what I'm saying? Like your property is not going to be at the top of the list for the most qualified tenants. Things to consider here with your property are maximum visibility.
You want people to come and look at the property. And not only that, when they get there, you want them to like what they see, right? So maximum visibility. Put some beautiful pictures out there of your property. Finally, desirability.
That's the second part of this. When they walk into the house, are the pictures that they saw online also what they see when they're walking to the property? Because if they aren't, they're gonna be let down already and that property is gonna go to the bottom of their list if what they're looking at in comparison are properties that are already turned over.
So again, maximum desirability, maximum marketability, and then casting the widest net possible and when... you get those folks to come in and walk to the home, they're ready to sign a lease because they're excited about what they saw both in your marketing and also when they're walking through the home. What is the goal in marketing your property well? You wanna find the most qualified tenants that are gonna take the best care of your property and stay for a long time because they like where they live and they get good service. So as we think about those things, great tenants, long-term tenants, responsible tenants, protecting your property, we have to consider what you're presenting as a product to those type of tenants that you're wanting to attract.
If you enjoyed this video, we have something we'd like for you to take away. It's a free document that outlines the different things you're going to want to consider when thinking about listing your occupied property. Also, if you enjoyed this video, I know that you would also enjoy hearing us talk about our application process. You click down here below, we can get that sent to you. Also, make sure you like, subscribe, share.
See you next time.