Selling An Investment Property With Tenants


– Hey, everybody. It’s Jeff Thibodeau
with Redline Properties. I’m here with my business
partner, co-owner, and our broker record, Mike Brown, and today, we’re gonna talk
about how it’s different to sell a tenant occupied
investment property, so stay tuned. (upbeat music) All right, so, Mike, you have
to deal with a lot of issues around selling a tenanted property or selling a property in the sense that it’s an investment property. It’s a lot different than selling just your residential home. What were you saying
are some of the big ways that it’s way different to
sell a tenant occupied property on the open market? – Well, number one, you’ve
got to deal with the tenants, whether the relationship is good or soured between the tenants can
make a huge difference, how you can take the
photos of the property, if you can take inside photos, make sure their personal effects
and privacy is considered while also making sure that
you’re not getting bullied by a tenant that’s saying, “Hey, you can’t show this property,” when you certainly can anytime between 8 a.m and 8
p.m provided proper notice. – Right, so that leads
us to an important point of putting a asking price
on an investment property, even if it’s a single family home but it’s a tenanted property, is a little bit different math and a little bit different process than putting on a
residential for sale price, so how do you come up with a market price for a tenanted property? – So I like to keep the end user in mind. If you can have multiple exit strategies on an investment property, it’s gonna be the best way
to maximize the revenue that you can get as a return and it comes down to what’s the cap rate and is the rent sufficient to
justify the purchase price. Some investors are willing
to take on a property that even has little bit
of a negative cash flow if the tenants are good and
taking care of the property and they’re consistent
with their rent payments because the landlord knows they’re gonna get the market appreciation for the house increasing in value and they know that they’ve
got some reliability there and a track record of steady payments. – For sure. Things we didn’t talk about
really was just sitting down and figuring out are we
getting current market rents ’cause something that’s
been going on in Brantford is the allowable rent
increase is a lot smaller than the actual rent increases that are possible in the market, so if you have a long term
tenant in your property paying low rent,
– Below for sure. – it’s gonna affect the value
anyone else is gonna pay, so it may be a strategy
of actually figuring out how to amicably end that lease term, either buying the person out of the term or incentivizing them to leave could make it a significant increase in the value of your property ’cause now you’re getting market rents instead of these locked in fixed rents. Well, that’s a whole ton of information when it comes to selling
a investment property. It’s completely different than selling your single family
home to another homeowner and if you need a little help, the best thing we can do
is start talking early and have a strategy session to see is a sale the right way to go or should we upgrade the property? Should we try to switch out the tenants? – Do you want us to help you analyze and make sure that you’re
getting the maximum return whether you’re holding it or
selling it, give us a call. – And then, of course, a
lot of sales can happen without even going to the open market ’cause if it’s a quality property, there’s always buyers for
quality investment properties, so if you need any help with this, just reach out to our brokerage and we’ll partner you up
with the perfect agent for your situation and we’ll
see you on the next video. (upbeat music) – And the easiest way to do that is a quick call in here to the
brokerage at 519-226-92080? No. Do I even know our own phone number? Okay. – 226-920-8280. (upbeat music)

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