Selling a property as a landlord has many moving pieces. Not only do you have a house to sell, but you have tenants to consider. Typically, selling a rental property meant you had to wait until the lease expired. This could mean several months to several years, depending on the type and length of the lease signed.
Fortunately, today it’s a lot easier to sell a rental property without waiting for the lease to expire. It’s kind of like having your cake and eating it too. You can sell properties with renters in them – it’s called turnkey properties, and real estate investors love them.
Here’s how it works.
The Problem With Selling a Property With Tenants in It
First, let’s address the problems you may face selling a property with tenants in it, as there are many. You don’t have the typical obstacles homeowners or investors face when selling a vacant property – you have other people to consider in the transaction.
It’s Hard to Show
When you’re selling a still-occupied property, you have to work around the tenants living there. It’s not just your schedule you have to figure out, but there’s too. You’re relying on them vacating the property and keeping it in good condition for potential buyers to see. It’s a big gamble.
Some tenants may not feel comfortable leaving the home unoccupied while strangers walk through it, which could put another wrench in your plans.
You Narrow Your Target Market to Investors Only
If potential buyers learn the home is currently rented and occupied by tenants, they typically won’t want anything to do with the property. Most new homeowners want a home they know was well cared for and maintained. Even if your tenants took impeccable care of the property, it’s a reputation rental homes have, naturally narrowing your target audience down.
You May Get Less Money for the Property
If you narrow your target market down, you’ll naturally get less money for the home. Sales prices are driven by supply and demand. There’s less fuss over the property with less demand, which means buyers can come in and bid low without much competition to worry about.
While that’s great for buyers, sellers walk away with less money than they anticipated, leaving them with a smaller profit (or even a loss).
Does all this mean you can’t sell a property with tenants? Today, it doesn’t. With fintech startups like Roofstock Marketplace, there is a large audience for turnkey properties, which means you don’t need to have a smaller audience, get less money for your home, or deal with the difficulties of showing the home.
What Is Roofstock Marketplace?
Roofstock Marketplace is a platform where buyers and sellers come together with a common goal – to buy or sell real estate investment properties.
It sounds similar to many other platforms, right?
It’s not. Here’s how they differ.
Investors come to Roofstock to buy properties already outfitted with tenants. They want tenants in the property, which solves the #1 issue most investors have when they want to sell a home – they don’t have to wait until the lease expires.
Rootstock investors want properties with a lease intact. It’s less work for them because they’re buying a property that already has tenants, which means they already have cash flow. Investors don’t have to worry about fixing up the home, finding tenants, vetting tenants, and selecting the right applicant.
When investors buy a rental property on Roofstock, they buy it with tenants in it with varying lengths of leases left.
Here’s how it works.
How Does It Work?
Roofstock makes it easy for investors to sell their turnkey properties. Rather than waiting for a lease to expire, fixing up the home, and listing it, you list the property with tenants still in it.
Here are the steps.
1. Submit Your Property Information
You’ll start the process by providing information about the property. You’ll answer a series of questions and upload pictures of the property. Make sure you provide great pictures and plenty of detail, as this is how Roofstock professionals determine a fair market price.
2. Roofstock Does Its Due Diligence
A part of the Roofstock process is Roofstock certification. This is what makes the platform so popular with buyers. All properties go through an extensive certification process to ensure it’s in good condition and doesn’t have any outstanding liens.
Roofstock will perform a professional inspection and order title documents to make sure there aren’t any outstanding liens.
3. Creating the Listing
Once you’ve gotten through the first two steps, Roofstock creates an attractive listing in their marketplace that they advertise to their hundreds of thousands of investors. The listing includes all information investors want/need to decide to buy an investment property sight unseen.
4. Manage Your Offers
All communication and offers go through Roofstock. Just like a typical real estate transaction, you can negotiate with buyers until you reach a mutual agreement. Once you sign a sales contract, Roofstock coordinates all the paperwork and starts the closing process. From start to finish, it takes around 30 days.
Roofstock directly connects to the investors you want to get your home in front of – investors looking for turnkey properties. You don’t have to weed your way through ‘other buyers’ who would turn away as soon as they hear the property has tenants. You market to the right audience and potentially sell your home faster.
What Are the Benefits of Selling With Roofstock?
Selling your home on Roofstock offers many benefits, including:
You Don’t Disrupt Your Tenants
If you’ve formed a good relationship with your tenants, the last thing you want to do is disrupt them, forcing them to show the property. When you use a marketplace like Roofstock, no one has to see the property except the inspector, which is a one-time inconvenience versus numerous buyers coming through the home to view it.
You also don’t have to worry about forcing the tenants to move. If they were planning to renew their lease upon expiration but you told them you’re selling the property, they’d likely have to find somewhere else to live. Selling your home on Roofstock, this isn’t necessary – they can stay put.
You’ll Price Your Property Right
Pricing your property appropriately is a tough task. You know how much you want to make on it, but is the property worth that much? You have a subjective opinion and need a more objective way to determine its value.
Paying a real estate agent or appraiser is one way, but they don’t provide the other benefits Roofstock offers. They can value the home for you, but they don’t market the property to your target audience. With Roofstock, you get the whole package – they’ll price the home fairly and do all the work to advertise your property to the people who want to buy it – investors.
Everything Is Done Remotely
Today it’s more important than ever to be able to conduct business from your home. Selling a home often doesn’t allow that luxury since you have to meet with professionals, show the home, and deal with the activity that occurs between signing a contract and closing the sale.
With Roofstock Marketplace, you do everything from your computer – safely. You create the listing, do the back-end legwork, and negotiate with buyers, all from your computer. All you have to do is follow along and make sure you’re good with everything occurring with the transaction, but you never have to leave your home.
You’ll Save Money
If you’ve priced real estate commissions lately, you may feel sticker shock. Paying 6% of the sales price is a big bite into your profits, but that’s the going rate today. When you use Roofstock, you pay a lot less to list the property.
In fact, listing the property is free. When you sell it, you’ll pay a 2.5% commission fee (the buyer pays 0.5% of the sales price). This means you pay half the commission you’d pay a real estate agent, and you get a lot more valuable services that are targeted to investors selling homes with tenants in them.
You Can Sell the Home Right Away
Normally when you have tenants, you have to wait until the lease expires to sell the property. If you just signed a lease but suddenly need to sell, it could put you in a difficult situation.
With Roofstock, you can sell the property at any point in the lease; whether there are two days, six months, or 12 months on the lease, it doesn’t matter. As long as your property passes Roofstock’s certifications, you can sell at any point.
As a part of Roofstock’s analysis, they’ll provide investors with information about the rental income, potential operating costs, and estimated net profit. This helps investors decide if it’s a good buy for them and may help move your home faster since all the work is done for the buyers.
You Collect Rent Until the Closing Day
Even though you’re selling the property, it’s nice to know you can collect rent until the property doesn’t belong to you. This means while you work with Roofstock to certify the property, list it, and deal with potential buyers, you collect the rent payments.
It’s not until you close on the property that the buyer starts collecting rent. You can enjoy a little more cash flow until the sale completes.
Is Roofstock Legit?
Of course, all of this likely sounds too good to be true. Can you sell your home mid-lease and still make money? Is Roofstock the real deal, or is it another scam?
Fortunately, Roofstock Marketplace is legit. They’ve facilitated over $2 billion in transactions since they started six years ago. The founders of Roofstock have 15+ years of real estate experience and extensive business management experience that combines to create a powerhouse team, helping real estate investors on both sides of the equation.
Who Can Invest With Roofstock?
This is the even better news – you aren’t limiting your audience to a select few investors, as you may think. Anyone can buy a property on Roofstock – they don’t need to be accredited investors. They just need to be able to secure financing.
In fact, using Roofstock Marketplace makes it even easier for investors to get started. This gives you a much larger audience to advertise your home to – they are investors who want to buy a home with an existing lease.
Buyers love Roofstock because it does the work for them. They don’t have to do too much due diligence. Although most attorneys would advise them to do a little research themselves, Rootstock does the bulk of it. If nothing else, Roofstock gives buyers a great starting point because it arms them with plenty of information to use for their decision-making process.
Sell Your Rental Property While Keeping Your Tenants With Roofstock
If you’re thinking about selling your property while you still have tenants, Roofstock Marketplace is the best way to make it happen. There’s very little disruption to your tenants, and you can sell the home while they still live there.
Roofstock helps you target the right audience rather than wasting your time weeding through buyers who want a home to live in themselves or don’t want tenants in the property. You may sell your home faster and for more money by advertising to the right audience on Roofstock Marketplace.