Here we are at the starting line of another Spring / Summer season and just as homeowners contemplate if this is the right year to sell their property, so are many Calgary landlord, tired from weathering the falling rental rates and extraordinarily long vacant periods. For many landlords supplementing rents to cover the basic costs is more than they bargained for and they are looking for relief!
Well there is good news for Calgary Landlords – according to CMHC’s James Cuddy
At GIL we are seeing property renting faster and for the listed rent – the days of tenants negotiating much lower rents seems to be fading fast. All of this is good news for landlords that decide hold on and can see the sun on the horizon – we predict it will be a slow but steady recovery.
For landlords who make the decision to sell it could be a longer road to travel. As CREB’s chief economist, Ann-Marie Lurie, describes “There’s just nothing happening that is really going to support sales growth“ She points to continued high unemployment as a key driver that — as it did in 2018- will negatively affect demand, sales and prices.
With supply still outnumbering qualified buyers, landlords willing to enter sale market need to ensure that not only does their property stand out as Great Value they also need to make sure their tenants are on board with the sale – a disgruntled tenant is certain death.
As Property Managers, we are experienced in managing tenant occupied homes while we represent the landlord in the sale. From this experience, I have refined my Top Three Tips to Selling a Tenant Occupied Home. These will go along way in not only maintaining a positive relationship with your tenants, but they will help make sure you get the best price possible in the shortest amount of time, something that will make both you and your tenant happy people.
Top 3 tips to Selling Tenant Occupied Property
In order to help make the situation more palatable to the tenant consider the following ideas:
Offer in hand … now what?
So, what happens if your get an offer and you want to accept it but there are still many months left on the lease? Well there are two distinctly different answers.
Month to Month Lease
In Alberta you can simply give 90 days notice to your tenants and negotiate your buyer’s possession day accordingly. I suggest you may want to consider a small incentive from below even in these cases because a happy vacating tenant is gentler on a property than an unhappy one.
Fixed Term Lease
Things are a bit trickier with these leases. You have two options. The first is to sell the property with the lease in place and the buyer accepts the existing terms of the lease. Once it expires, they can take physical possession of the property.
Alternatively, you can approach your tenants and see if they are interested in an early termination. Sometimes a tenant, who can see the writing is on the wall, will take you up on the offer and vacate early – especially if its in a season where the weather is good – who wants to move in the snow!
However, some tenants may need a little more enticing to leave early. Offering to pay for a mover, pay the first months rent at their new property or credit them for their final month(s) rent at your property can all be great incentives. It is Important that you remember that it must be your tenant’s decision to terminate early or you may find yourself in contradiction with the Alberta Residential Tenancy Act. If your tenant is determined to stay until the end of their lease you must respect the decision and uphold the terms of the lease without undue pressure.
So, in finishing up this post I just want to leave you with this one thought – it was shared with me in my first Real Estate licensing course and has stuck with me to this day.