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Do I keep my tenant in my rental property while I go through with a short sale?

We have had numerous investors approach us with this question and knew it was time to make seattleshortsaleblog’s latest post addressing this issue. The questions we get are, if I list my property for sale as a short sale, should I keep my tenant or ask them to leave? Due to the fact that a short sale takes so long, should I keep the property vacant?
The answer,
keep your tenant!


That cash flow is important. Here are some tips to help you in dealing with your tenant or in getting a tenant for a short sale.

1. For each showing where the property is tidy, and the property is available on time for the showing, reward your tenant with $10-$25 per showing off of rent. Cap the amount at a couple of hundred dollars per month.

2. Explain to the tenant of the property what is to be expected with a short sale. As long as the expectations are set at the beginning of the short sale, most tenants will absolutely be respectful and grateful to know what is to come. Make sure and explain that a short sale takes approximately 4-6 months, and sometimes longer. If there is a potential auction date on the property, keep them informed and tell them that you or your real estate broker will keep them posted on what is transpiring.

3. If you are going to short sale the property but want some cash flow. Advertise your property below market and on a month to month basis. Plenty of people are looking for short term housing.

If you do put your investment property on the market, make sure to find a real estate professional who communicates well with the tenant as this is vital to keeping the property in good condition so there are no issues with having access to the property.

SSB

Written by SSB

6 Comments

  • This is a very important point, and I basically agree although it should be said that once in a while a tenant is very unmotivated to keep the place up and detracts from the potential sale. But the motivating strategy you mention seems like it would have a great chance of working and would make the entire process go more easily. We just opened up a Fremont location and would love to have you come to the office and talk to the agents, some of my clients who purchased are now thinking about doing short sales but it would be good to have a specialist give us some tips on the finer points!!

    Reply
    • Edy,

      Yes, I would be happy to come and chat with you and your agents at your new Fremont office. Time permitting, I could bring a couple of our team members who are a wealth of knowledge. If you want to have some of your clients attend as well, you are welcome to invite them. We actually do teach short sale classes as well if you would like to attend.

      You do bring up good points as some tenants are just not motivated to keep a property clean and does detract from the potential sale. Most of the time, we are successful in overcoming this issue but it can be a challenge.

      SSB

      Reply
  • Some great tips on dealing with tenants during a short sale. Tenants can always be a little difficult in a real estate sale regardless of whether it is a short sale or not!

    Reply
  • Wanda Jackson on

    While our landlord was showing her property for a short sale, my attorney said we should accept nothing less than 1/2 off our rent each month the place was shown if they wanted us to keep the place looking extra nice. After all, we pay for the quiet and exclusive use of our home, and people coming in and out totally destroy our home life. It has been a total nightmare for us. We have also had things stolen with neither the realtor or landlord taking responsibility. We are in the middle of a lawsuit at this time.

    Reply
  • I would like to know information about moving allowances for short sale. I think that it is between $3,000.00 to $5,000.00 for tenants to cover moving expenses. Any feedback.

    Reply
  • My landlord is short seling the house I have been renting for the last 12 years in California. I think that this qualify me for $3,000.00 to $5,000.00 moving assistnace. Any feedback…

    Reply

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