REAL ESTATE MARKET REALITY

One of the more difficult scenarios for property managers occurs after the property has been leased for a few years and the owner decides to sell the property.  Somehow, over the time the tenant was in place, the owner’s recollection of the condition of the property at move in becomes rosier and more perfect.  It is not unusual for owners to think that tenants should pay for work that a professional property manager considers a condition caused by normal wear and tear.  However, this perception is often magnified when the owner decides to list the investment property for sale.

The landlord needs to remember that even if the rent didn’t cover the owner’s mortgage, the rent did offset expenses.  There was someone in the home, using the appliances and systems, which is better for the home.  The tenant may have paid utility bills and been responsible for part of landscaping responsibilities.  Also, many insurance companies won’t insure a home if it is vacant or if they do so, the price may be much higher.

In the current market, most owners have gained significant appreciation in the last several years.  Having a tenant in place made it much easier financially to hang onto the property until the market improved.  The downside is that someone lived in the home and wear and tear occurred.  It is normal for an owner to have expenses associated with preparing a property for sale, whether owner occupied or tenant occupied prior to listing it.

Prior to putting a property in the rental pool, a prospective landlord needs to understand that there will be costs associated with owning an investment property, including at the end of the lease when the home is going to be listed for sale.

We are here to help you and your clients with all aspects of the rental market. Please contact us for further assistance!

 Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.