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In this video, Greg Doering, owner/broker of GDAA Property Management, shares some tips on how to make the transactions smoother and how to close the sales easily when you are working with a buyer of an investment property with an existing tenant.
The first thing you need to do is make sure the tenant understands that even with the property being bought or taken over by a new owner/landlord, the lease will still be in force until the specified expiration. You need to assure your tenants that they don't have to move out just because the property is being sold.
Next, you need to transfer the security deposit to the new owner. Make sure you have full and accurate accounting when the transfer takes place, so that both the buyer and tenant are protected. This is done to ensure that there will no problems forthcoming when the tenants vacate the property. You will also need to disclose the full security deposit amount.
Pro-ration of rent is the next step. The existing seller owns the property until the day of sale, so if the tenant is paid for the full month, they are entitled to all the rental proceeds until the day of sale. Once the property is turned over to the new owner, the new landlord gets the remainder of the rent.
Make sure the tenants are given the new owner's contact information at the time of closing or a little beforehand. They need to know where to address the rental proceeds to, or who to call for maintenance issues and other emergencies.
You may also want to obtain a copy of the tenant's application. This is in case something goes wrong later, more specifically, in case you need to do collections. Applications usually have pertinent information on the tenant, such as crucial phone numbers and their Social Security number.
Lastly, try to obtain a full accounting of the tenant in the property. Make sure their payment history is on file, if there's been any concessions made for late payments, and if they pay on time. This helps the new owner get to know the tenant and their payment history.
We hope these tips help you and your buyer make that smooth transition. If you're in need of expert property management services, sage property management advice or want to check out our available #ApartmentsinLeanderTX, please don't hesitate to call or visit our website. Thanks for watching!
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