Sell Duplex with or without Tenants?

[Manco Snead]

Greetings,

Selling my OOS duplex in Iowa; has been listed for about 3 weeks. Currently has one unit rented and am deciding if I should put a tenant in the currently vacant unit or not. I'm seeing benefits/risks to both options. Thoughts?

Much thanks.

[Kristine Hodges]

I’d leave one unit open.  Then it can be purchased by an owner-occupant for a house hack.  Or an investor who would probably prefer to choose their own tenant.  You can show the current lease as proof of market rent, so I wouldn’t worry about filling it for an investor buyer.  But you’ll lose a large portion of your potential buyers if they can’t occupy the empty side.  

[Andrew Freed]

@Manco Snead - I'd leave it open. You will get the highest price from a househacker who is using an owner occupanied loan. If you did feel a need to rent it, you could always have the person set up with a month to month lease so the new owner could ask them to vacate if they want to occupy the property. 

[Tristan O'Reilly]

Based on my experience here in MN, I think the one tenant is perfect. It proves the market rent, while still keeping it open for a house hacker to purchase the property. If you're forced to get another tenant, I'd stick with a month-month lease, so the next owner can come through and make the final decision. Good luck!

[Ryan Irwin]

Agreed with the common theme here on leaving one unit vacant.  Provides cash flow but options for the buyer on if they want to do property improvements and/or lease restructure.  Where in Iowa is it located?  

[Nathan Gesner]

I agree with the others. Leaving one unit open enables you to conduct short notice showings. Savvy buyers will want to place their own tenant and won't mind the vacant unit. It's also attractive to anyone looking to house hack because they can occupy the vacant unit themselves.

[Jason Allen]

Quote from @Kristine Hodges:

I’d leave one unit open.  Then it can be purchased by an owner-occupant for a house hack.  Or an investor who would probably prefer to choose their own tenant.  You can show the current lease as proof of market rent, so I wouldn’t worry about filling it for an investor buyer.  But you’ll lose a large portion of your potential buyers if they can’t occupy the empty side.  

I agree. In most cases, when selling, the best situation to be in would be one side empty and the other on MTM. It's a little risky to have both sides empty, from a cashflow and crime/squatter/maintenance perspective. Especially if it sits for a while, which is likely in the current market. That said, having both occupied when showing makes showing a royal pain, and pisses off the tenants. (I tried that once, and both tenants left before the sale concluded.)

[Benjamin Sulka]

I concur with what everyone said. I'm an aspiring house hacker and buying a property with one unit vacant would be ideal for my situation. Otherwise, I would have to wait until a lease is up or not purchase the property at all. Leaving it vacant leaves the option for a traditional investor to purchase and to choose their own tenant and leaves the option for a house hacker as well. 

[Julien Jeannot]

@Manco Snead

I'd leave one unit open for the same reasons as the other replies.