Showing a home for rent before it’s ready or when it’s still tenant occupied. Good idea, right?
Should you start showing a home for rent while still tenant occupied? No, you should wait until the home is vacant and shows well. But why wait until the home is vacant? We want to minimize lost rent, right? Yes, but we also want to attract a good long-term resident. We also want to avoid potential liability in a very litigious business.
Let’s go over the reasons why you should only market a home for rent when it’s vacant and rent-ready. Boy, I don’t even know where to start on this one.
Okay, let’s start with you get a better resident. When the home is vacant, it shows better and will attract a better resident. A vacant home is clean, attractive, and ready for move-in. It presents much better than an occupied home with junk everywhere and dirty dishes.
Next, you may have disgruntled residents in the home. If we have a disgruntled resident in the home, for whatever reason… for example, maybe they were charged a late fee and they’re holding a grudge, they may say negative things about your property or the management company. This will start off a new relationship with a resident on the wrong foot.
Next, you run the risk of a stale listing. If a home is not renting while tenant-occupied, the rental listing can go stale. A stale listing is when the home stays on the market too long. This causes prospective renters to wonder what is wrong with the house, resulting in even longer days on the market.
Next, you can have privacy concerns and even accusations. Residents push back on having their privacy invaded. This can escalate into an accusation of personal injury, their personal property damaged, or even stolen by strangers in their home. Let me ask you, if a stranger came to your house and wanted to see the inside, would you let them in? That’s a big problem showing rental property. Showing a home for rent is a lot different than showing a home for sale. For showings where a house is for sale, the buyer looking at the house has been pre-qualified and usually has a relationship with the Realtor, they’re not a complete stranger. This is not the case in showing a home for rent. You don’t know what kind of person is walking through that door. And if you’re thinking of just sending a tenant prospect to the house and have your tenant show them around, now you’re talking maybe practicing real estate without a license, big trouble.
Next, you can have a big problem if the current resident holds over. We all know life happens. If the current resident holds over (basically stays longer than expected), or worse, decided to stay and not move out because their life has changed, now you have a problem. It’s not uncommon that residents change their mind and stay. This has happened with us numerous times where the tenant decided to stay and not move. If you already rented the home to a new tenant and they don’t leave, there may be a household with potentially nowhere to go. You don’t want to do that to people.
Next, we will know why a home isn’t renting. When a vacant home is in move-in ready condition, but yet isn’t renting, we know exactly why. It can only be one reason. It is priced too high.
Alright, the next one is really important. Okay, back in the 70’s there was a comedian Flip Wilson and he had a character, Geraldine. Geraldine had a phrase, “What you see is what you get!”. Now here’s what’s important about that. This is what you want, when you show a home for rent. What you see is what you get. When a home is vacant & rent-ready, it’s very clear, the home you see is what you’re getting. When you’re showing a house that is occupied and not rent-ready, you can’t say that can you? You may have to paint it, make repairs, clean it, whatever. This is trouble. How? Okay, it’s time for the tenant to move in and they’re really unhappy. I can hear it now. You said you were going to paint the house, this house isn’t painted… No, I said I was going to touch up the house. You said you were going to paint it beige… No I said I was going to paint it gray. You said you were going to replace the carpet… No, I said I was going to clean the carpet. There’s this, there’s that. I’m getting stressed just thinking about this. Managing property is stressful enough, don’t make it worse.
Also, you could be violating the Deceptive Trade Practices Act. If the home is not in the condition as advertised, it could be viewed as misleading and a possible violation of Deceptive Trade laws. The resident may think they were supposed to get a different looking home and file a complaint. Who needs that? The government steals enough money from you, don’t give them a reason to come see you.
Moving on, how about, you’re inviting a security deposit dispute. If a tenant moves out and we discover they caused property damage, we will charge their security deposit for the repairs. Tenants may dispute the charge or expect to not be held responsible because, hey, they “did you a favor” by showing your property. The last thing you want is a security deposit dispute. Security deposits are legal landmines.
Okay, let’s wrap this up. Although it may seem like you’re getting ahead by marketing a tenant-occupied property to minimize lost rent, the reality is, it is best to only market your home when it is vacant. It will show better and rent faster.
You will attract a better resident who will make you more money over time. You’ll expose yourself to less liability, avoid the risk of a stale listing, and just have less stress.
Just remember Geraldine when showing a home for rent. What you see is what you get!
I’m Michael Bielon. If you ever need any help with your property, please reach out to me. Thanks for watching.
