| by Kenneth Chase | 1 comment

Selling an Apartment with Existing Tenants in NYC [2019] | Hauseit®


Selling an apartment in NYC with existing
tenants in place can be much more challenging than selling a vacant apartment. This is especially so if you’re selling
a co-op or a single-family home which is not catering to an investor buyer base, as the
buyer will likely be an owner-occupant who won’t want a tenant to be in place post-closing. Looking to sell a home in New York City? Estimate your seller closing costs in NYC
using Hauseit’s interactive closing cost for sellers available at www.hauseit.com . While
you’re visiting, you can also learn how to save on commission and closing costs through
our Agent Assisted FSBO and 1% Full Service Listing options for sellers in New York City. If you’re selling a condo or a multifamily
property, having an existing tenant can actually be beneficial. This is because the majority of investor buyers
would ideally like to have a tenant in-place as quickly as possible after closing. In some cases, investors specifically look
for units with tenants in place in order to minimize the risk of vacancy (and zero cash
flow generation) after closing. Regardless of what property type you are selling,
the best case scenario is to have an existing tenant on a month-to-month lease. Investors will like the idea of carrying over
the tenant post-closing, and owner-occupants will appreciate the flexibility of being able
to terminate the lease so that they can take occupancy of the property right away. It’s also equally valuable to have a tenant
in place, provided that the lease has an early-termination clause in the event of a sale. The key disadvantage of having a tenant in
place, regardless of the lease terms, is the fact that it’s significantly more difficult
to accommodate private showing requests and hold open houses. Another disadvantage is the possibility that
the tenant keeps the unit in an unsightly condition, perhaps even so bad to the extent
that it’s not possible to take professional photos. Is It Easier to Sell a Vacant Apartment or
One with a Tenant in Place? It’s much easier to sell a vacant apartment. If the lease does not clearly lay out the
notice period for showings, a tenant could make unreasonable demands such as requiring
3 or even 5 days’ notice for any viewings. If a tenant is really uncooperative or resentful,
they could essentially sabotage the entire sale process by routinely declining all open
house requests. Under a worst case scenario, the tenant could
simply not respond to all showing requests which means you’d never be able to show
your home. Should a Seller Wait Until the Tenant Has
Vacated Before Listing? It depends. If your tenant is highly uncooperative or
keeps the apartment in an unsightly condition, it may be advisable to wait for them to vacate
before listing. This is because the condition of the apartment
would make it impossible to take professional photos, and buyers who do view the property
may lose interest in the unit simply because it’s messy or dirty. Listing your home with a tenant in-place isn’t
always a bad thing, especially the tenant is generally cooperative and keeps the apartment
relatively organized. Most investors will actually prefer that a
tenant is already in place, as it means there’s no risk of vacancy shortly after closing. The other key drawback to waiting until a
tenant has vacated before selling is the fact that you’ll have no rental income to offset
your carrying costs during the sale process which can take 6 months or more in NYC.

1 Comment

Dylan Coleman

Aug 8, 2019, 3:46 pm Reply

This can be extremely frustrating. One of my friends is trying to sell a mixed use building in Brooklyn (2 apartments with a ground floor commercial unit), fully leased out with multi year leases. But it's impossible to coordinate and get access to all 3 units at the same time. As a result, they've lost out on offers because buyers have gotten fed up with waiting. Not really an easy solution.

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