Should I Place Tenants in My Duplex Before Listing On the Market? 44120

[Evan Price]

I purchased a duplex in the Mt. Pleasant area of Cleveland in 44120, and had some decent tenants that are vacating the property. I'm not sure if I'd like to take a chance in sourcing new tenants in the area and hoping I don't get bad ones, given that the area seems to be one that lots of people stay away from. That said, I'm considering selling the property to cut my losses before they happen. Are properties such as this more appealing to buyers with renters already on leases or will I get more interest and a higher sales price if I sell the property vacant? 

[Caleb Brown]

If you are selling leave it vacant. It will say way faster, easier for showings and easier for everyone involved. 

[JD Martin]

Quote from @Caleb Brown:

If you are selling leave it vacant. It will say way faster, easier for showings and easier for everyone involved. 

Agreed. All things considered, I probably don't want your tenants. 

[Bill B.]

You especially need one side empty for any owner occupant buyers. The only thing a tenant does it prove the rent you can collect as opposed to a proforma of suggested rent. At least prepare solid rent history showing how much you collected and if it was paid on time. 

[Andrew Weiner]

People will argue both sides.  In that area there aren't a lot of owner occupants so I don't think that's a much of a consideration.  Some buyers don't want your tenants who may or may not have been screen properly but some buyers like the attraction of having income on day one.  Since you will have it on the market sooner vacant I think that would be my preference going into winter, if it were closer to summer I would put tenants in.  

[Alfath Ahmed]

Quote from @Evan Price:

I purchased a duplex in the Mt. Pleasant area of Cleveland in 44120, and had some decent tenants that are vacating the property. I'm not sure if I'd like to take a chance in sourcing new tenants in the area and hoping I don't get bad ones, given that the area seems to be one that lots of people stay away from. That said, I'm considering selling the property to cut my losses before they happen. Are properties such as this more appealing to buyers with renters already on leases or will I get more interest and a higher sales price if I sell the property vacant? 

 Vacant will be the best option unless you have a good high paying tenant on one side that you can show is adding value. 

[Theresa Harris]

Sell it vacant for so many reasons.  You want to appeal to the most people and many buyers will want to live in the home, so having tenants will limit who it appeals to.

[Jack Krusinski]

Hi Evan! For the area I would recommend getting tenants in the property as long as the rents are at market rate! That is a very critical part. I would not put in tenants where rents are very below market rate as that will make it more difficult to sell. Also, I would try and get professional photos before the tenants move in.

[Bruce Woodruff]

Vacant, vacant, vacant.....

[Alan Asriants]

If you plan on selling the property always try to leave at least one unit vacant this way you allow for more types of buyers like house hackers or investors. If you have both units occupied with yearly leases, the new only limit yourself to Investor only. Also, it is a lot easier to show the property with an empty unit. 

[James Wise]

Quote from @Evan Price:

I purchased a duplex in the Mt. Pleasant area of Cleveland in 44120, and had some decent tenants that are vacating the property. I'm not sure if I'd like to take a chance in sourcing new tenants in the area and hoping I don't get bad ones, given that the area seems to be one that lots of people stay away from. That said, I'm considering selling the property to cut my losses before they happen. Are properties such as this more appealing to buyers with renters already on leases or will I get more interest and a higher sales price if I sell the property vacant? 

 Lots of crime over there, I'd say best bet would be 1 occupied and 1 vacant. Inherited tenants are usually a negative, however in that area leaving the duplex totally vacant makes it a target for thieves to come in and steal your pipes, furnace, and hot water tanks. So 50% occupied is probably the best bet.

[Samuel Diouf]

You'll get much more interest if the property is vacant but.. If you're able to get tenants paying over market rents, you can also gain a lot of interest because of the heavy cash-flow. 

[Regina Blake]

Hi, it is your choice. I have done business both ways with and without tenants. Please reach out if you have any questions. Best Wishes!

[Kevin Sobilo]

@Evan Price, it doesn't sound like you had a bad experience here. So, I'm more curious about your motivation to sell. From the little you mention, it sounds like simply a risk aversion issue.

If you sell, will you invest the proceeds in something else for example the stock market?

If so, consider that with a stock you have NO CONTROL whereas with your rentals you have quite a bit of control over how the business is run and how successful it is.

You are averse to a bad tenant situation such an eviction. Nobody likes them, but tbh when something like that happens I sort of smile! Do you know why? Its because I can look at the situation and say that I'm having these kinds of bad situations LESS than I plan/save for! So, that means I'm SUCCEEDING!

Yes, when bad things happen its a great time to be look at how you planned and prepped to be able to handle those things and feel GOOD that you were able to manage things such that they are turning out BETTER than you planned for on average.

So, bad situations are simply part of the work of the landlord, absolutely NOT something to be afraid of only something to be prepared for.

Tenants are like tires on your car. You might budget for them to last 20,000 miles, but if you rotate them and avoid damaging them they might last 30,000 miles. When you go to buy a new set if you have budgeted for it, you can smile and know you got 50% more out of those tires even though you now have to pay a big chunk of money to replace them. Bad tenant situations happen but like tires you can prepare and you can learn to manage property such that they happen less often and with less impact on you.

[Russell Brazil]

No

[Evan Price]

Quote from @Kevin Sobilo:

@Evan Price, it doesn't sound like you had a bad experience here. So, I'm more curious about your motivation to sell. From the little you mention, it sounds like simply a risk aversion issue.

If you sell, will you invest the proceeds in something else for example the stock market?

If so, consider that with a stock you have NO CONTROL whereas with your rentals you have quite a bit of control over how the business is run and how successful it is.

You are averse to a bad tenant situation such an eviction. Nobody likes them, but tbh when something like that happens I sort of smile! Do you know why? Its because I can look at the situation and say that I'm having these kinds of bad situations LESS than I plan/save for! So, that means I'm SUCCEEDING!

Yes, when bad things happen its a great time to be look at how you planned and prepped to be able to handle those things and feel GOOD that you were able to manage things such that they are turning out BETTER than you planned for on average.

So, bad situations are simply part of the work of the landlord, absolutely NOT something to be afraid of only something to be prepared for.

Tenants are like tires on your car. You might budget for them to last 20,000 miles, but if you rotate them and avoid damaging them they might last 30,000 miles. When you go to buy a new set if you have budgeted for it, you can smile and know you got 50% more out of those tires even though you now have to pay a big chunk of money to replace them. Bad tenant situations happen but like tires you can prepare and you can learn to manage property such that they happen less often and with less impact on you.

 Kevin, I appreciate your candid thoughts and questions. My motivation to sell was because I figured I had just purchased an investment in a bad area, and I was essentially doomed to make a profit/even break-even on it. I was doing a lot of doom scrolling and every place I looked, investors seemed to be absolutely trashing the area and telling people to avoid it. 

However, I stepped away from the doom scrolling and just looked at the numbers and my actual experience. I actually had some pretty decent tenants, and they can't be the only decent tenants who would live in the area. I'm going to hold onto the property and give it at least another year before I decide to emotionally sell.