As the real estate market in Pensacola is improving, more hesitant or forced landlords are seeking to sell their tenant occupied rental properties in the Pensacola area. For the first time in years, accidental landlords are able to sell their properties. You may be looking at capital gains taxes and running out of the timeline allowed to sell. Check with your accountant for advice on this.
If you are a landlord of a duplex, apartment, or lower end property, it is most likely advantageous to sell your property with a tenant who has an existing lease so this advice does not necessarily apply to you. Investors looking to purchase properties want a property with a current tenant in place so keep that in mind! Most of the properties in our rental portfolio will only be marketable to home owners looking to purchase an owner occupied residence.
If you dislike being a landlord or are in the financial position where selling your property is a necessity for you, this advice is for you.
If you are considering selling, consider our best practices for selling your rental property before making a move to list your home.
1. Approach your tenants first!
You may already have a ready, willing and able buyer. We just closed on a property this week for a landlord whose tenant purchased the home at fair market value and have another duplex under contract with current occupants.
2. Consider putting the property for rent or for sale when you place it on the rental market.
Unsure whether you want to try to lease or sell? Let us put it on the market for rent or for sale when your tenants give notice to vacate.
Consider the average time on the market for Pensacola homes for sale is approximately 90 days whereas the average time on the rental market is about 30 days. If you are really anxious to sell, it’s best to list it a month on the sales market prior to listing it for rent. While your home being on the sales market may turn away a few renters, it will not keep your house from selling and may even entice a buyer to act faster.
3. Review your lease agreement.
Does your tenant's’ lease agreement address the sale of your property? Remember, Florida Landlord Tenant Law does not cancel your lease agreement upon the sale of your property and the new owner is bound to fulfill this lease agreement unless your lease states otherwise.
Luckily, our lease agreement says that tenants can be given a 60 day notice to vacate and terminate their lease once the property is under contract for sale. Consider the tenants required notice period as well as the time it will take them to vacate before listing your rental property for sale.
If your tenant is in a lease agreement, it will be necessary to give your tenant proper notice to vacate. The law can be confusing in this area and largely depends on what your lease agreement says so if you are homeowner in the state of Florida without a Realty Masters lease, consult your lease agreement and Florida Landlord Tenant Law.
4. Consider your tenants lease expiration date.
Don’t put the property on the market for sale when tenants have just moved in or renewed their lease. They will be mad and a scorned tenant is not in your best interest. Think of how much effort is required to move, much less all the extra cost involved in moving. Your tenant will not be cooperative, happy, or good to your property during the time they reside in your home.
We find one of the best times to list your property is 2-4 months prior to your tenants move out date.
5. Consider deadlines for the sale and communicate a plan of action to your tenant.
If you do have interest in selling and don’t want a vacancy, the best course of action is to set a timeline up front to the tenant. It’s best to approach your tenants to explain your desire and necessity to sell and learn their intentions at the end of the lease renewal. Once knowing if they want to stay or are going to move regardless, you can plan an appropriate course of action. If they want to stay, set the expectations and timelines upfront.
For example, you could list the property 90 days prior to the lease expiration and remove it from the sales markes if it doesn’t sell within 60 days.
Make sure be sure you communicate a plan you will agree to stick to prior to talking with your tenants.
6. Consider an incentive for the tenant.
Don’t expect your tenants to be as interested in selling your property as you are! Incentivize them to do so. For example, we have seen owners offer a slightly reduced monthly rent and a full return of the deposit even when repairs are necessary as a financial incentive for showings. We recommend offering an incentive to your tenant if you want a smooth sale.
One of the biggest hurdles when selling your tenant occupied home is delayed access to the property. Florida Landlord Tenant Law require reasonable notice as defined as 12 hours. Our company policy is to require next day notice in order to meet the threshold the law defines. Real estate sales happen in real time and don’t always provide advanced notice. You must realize your home will miss showings to qualified buyers due to this time delay. Renters become disheartened by the number of showings and feel their quality of life is decreased when their home is being marketed for sale. This can cause a tenant to be uncooperative in showings or inspections, vacate your property or even attempt to break their lease early.
Tenants have never sold a property and don’t understand the process. Showing your home to multiple sets of buyers repeatedly causes inconveniences and can be seen as an intrusion in privacy. Offering them a financial incentive leads to tenant buy in and will help you achieve your goal of selling your property.
7. Your rental home probably needs some sprucing up to be competitive in a real estate market with owner occupied homes.
Your tenants don’t necessary want your home to sell and most likely hope it does not sell! With competing interests, your property will be harder to sell than a normal owner occupied Pensacola area home.
Renters may not necessarily keep in the home in show ready condition. You can avoid negative showing feedback if you have a Realtor walk through your home prior to listing it. Listen to their feedback and make any cost effective changes possible prior to listing your house on the market for sale.
- Consider a home inspection prior to the sale so you can address issues that be present in your inspection. If your windows are fogging, roof has less than 5 years age, or your siding has a lot of wood rot, this will cause problems. Items like these are common and can be expensive repairs that may prevent you from selling your property to an FHA or VA buyer due to lending restrictions. It’s better to know and address as many items upfront to be sure your ready, willing, and able buyer will be able to purchase your home.
Are you interested in a market anaylsis for your rental property? Reach out to our sales team or email me!
Nicole St. Aubin, Broker Associate
#1 in Pensacola Rental Houses
It was a hard summer for Pensacola rentals! We experienced the lowest inventory we've had in years and saw rental prices increase nearly 5%. Typically, summer is the preferred season for renters to move due to school aged children and PCS Season. Because so many people prefer to move in summer, as a renter you face a huge disadvantage due to competition and the laws of supply and demand.
Now that school has started and the holidays are in full swing, we are seeing a huge influx in rental inventory and seeing reduced rental rates. So why move in summer? Now is the time to move.
Fall and winter are the best times to move in Pensacola!
1) There are more options to choose from! There are nearly 200 more rental properties on the Pensacola market today than there was in July. In summer, we had residents give move out notices only to retract those notices because they could not find a suitable property to rent. Why move when everyone else is trying to move?
2) There is less competition. All summer we had two and three applications on each rental property. Not anymore! Take your time browsing and find the home that is right for you.
3) Rental rates are lower. When there is limited supply, rental rates increase. When there is an increased supply (like now!), rental rates decrease.
Here's Mitch giving you a quick glance at over 50 rental properties in the Pensacola area while explaining some reasons to make your move this fall.
So basically, you can get a nicer house, for less money, and enjoy a less stressful house hunting experience. We have over 50 rental properties available, check our list to find a cozy home to move in to this fall!
Moving out of a Realty Masters Rental Property
We want all of our residents to receive a full security deposit return! We also want our residents to leave the house ready for the next resident.
Watch this video for tips on how you can receive a full security deposit refund in 15 days. Moving is hard- it takes a lot of time and proper planning. We understand how stressful the moving process!
Because we typically have residents moving in right after you vacate, it's important to plan your move and ensure you leave plenty of time to clean, have the carpets professionally cleaned, and have the lawn manicured. Florida Landlord Tenant Law and your lease agreement require these items to be done by the resident. If not completed, the law allows the owner to hire workers to complete the work and make a claim against your security deposit if we have proper documentation to support the claim.
Please consider how you would like to find a home when you are moving in and understand that if you do not leave the home in white glove clean condition, we will have to hire a cleaning service and make a charge against your deposit which can delay the return of your security deposit up to 45 days! Most residents do not clean as thoroughly as thoroughly as they would expect a home to be cleaned upon their move in. Because of this, we suggest hiring a cleaning service upon move out to ensure your deposit is not tied up due to minor cleaning charges.
Give us a call or email us with any questions you may have about moving out of a Realty Masters rental property in the greater Pensacola, Florida area. We are happy to explain the move out process and answer any questions you may have.
Realty Masters of FL~ (850) 473-3983
Here you are staring at the thermostat with the display showing the A/C is set at the lowest setting possible. You expect the house to feel like the inside of your freezer, but the house still feels warm. Some may find this statement all too familiar: "My house won't cool below 68 degrees and I've been running it all day!" In Florida, the days between early May - late August are hot!
The spring and summer seasons provide some of the most enjoyable weather Florida has to offer, but residents would enjoy a reprieve from the heat in their own homes.
The next time you are questioning your A/C - Try out these helpful tips to have a more comfortable, energy efficient Spring and Summer season.
The First Step is to know your Climate
The average humidity in most areas of Florida will be above ~70%. All the constant moisture in the air is going to make the outside temperature feel hotter than it would otherwise be. Your A/C may constantly fight the high outside temperatures to keep the inside of your home cool. Gulf Power recommends keeping your thermostat set on 78 in the spring and summer. One of the reasons for this is that most a/c units simply will not cool below 15-20 degrees of the outside temperature.
Let Gulf Power help with your energy cost
Gulf Power has established a program called Budget Billing to help out cosumers with their higher bills in the spring and summer. With Budget Billing, you will pay approximately the same amount each month based on an average of your previous 12 months' electrical usage. For more information and see if this would work for you; Click here.
Put the Personal Touches on your A/C
Do you have a programmable thermostat? There are low-cost thermostats that allow you to control when your A/C will run. If you are away from home for several hours during the day, it is best practice to set your A/C around your schedule. Gulf Power offers a program called Energy Select that will install a free programmable thermostat in your home. For more information and to see if you qualify; Click Here.
Perform Maintenance Regularly
- Change the A/C filter once a month to allow optimal air flow. Especially if you have pets, the 3 month filters do not last 3 months. We recommend the 1 month filters only for improved a/c efficiency.
- You should plan on flushing the condensation drain line at least once a year. Pour 1 cup of bleach followed by 2 cups of water the next day. There are specific bacterial solutions to clean HVAC condensation lines, but bleach works as well.
Your A/C needs maintenance when:
- It is leaking water outside the unit
- There is frost buidup
- Unit blowing warm air
- Unit is not blowing any air at all
Contact your Property Manager if any of these problems occur and we will gladly send a technician.
If your A/C is set below 72 degrees, your A/C may run all day and not reach the desired temperature due to the heat/humidity of outside; however, that does not mean your unit is not working. Keep in mind, if the technician is sent and no problem is found, you may be billed for a service fee.
Other things you can do to make your home feel cooler
- A good way to beat the heat is to dress for the occasion. Avoid dark color clothes that will absorb heat and try to wear light, natural fabric that will keep you cool.
- Run any ceiling fans around your home that will make it feel cooler than it is. Make sure your ceiling fans are switched for summer.
- Check the doors and windows around your home to ensure hot air is not coming in. Notify us if you find any issues that need to be corrected.
- Make sure all blind/curtains are closed to block sunlight heating up your home.
Conducting routine, consistent inspections at your rental property is one of the most important ways you can monitor your home during the leasing process.
Here is Carlin Symmes, lead inspector at Realty Masters, discussing the importance of a move in inspection.
We document the condition of the property one to two days prior to a tenants move in for many reasons.
- Most importantly, to ensure the home is ready for move in and that all necessary repairs were completed.
- Secondly, to have documentation needed in case there are damages beyond normal wear and tear when the tenant moves out. Photos and a written form are completed during every inspection. It is also important to note that you should have photos of the home in good condition also and not just photos of any discrepancies found.
Not conducting routine inspections before, during, and after the tenants move out is one of the most common mistakes rookie landlords and inexperienced property managers make.
A move in inspection is also valuable to a tenant. Each of our clients are given a move in inspection to complete within 72 hours of move in. Make sure if you are moving into a new property, you document any issues with the home in writing and submit to your landlord upon move in. This protects you at move out!
Let us know if you have any questions about the move in inspection process.
5 Tips for Pensacola Renters: Finding a home in a competitive market
- Do your research! Look up school districts, view all photos, walk down with street view on google maps, do a sex offender search. Read our blog here for more tips and websites to do research. If there is a real deal breaker, know about it in advance and don't waste everyone's time. Remember, a lot of the homes on the market are occupied so an appointment has to be arranged with a property manager and a current resident!
- Don't be so picky. I know, you want a fabulous house for as little as possible, we all do! With low availability, you can't be picky about
- Not all homes are brand new or just remodeled. If that's what you require, you will have a harder time finding a place and will have to act fast.
- Sure, East Hill is a great place to live but with only 5 rentals available in the area and a median price of $1,000 per month, it's nearly impossible to find a 3 bedroom 2 bath affordable rental in the area. Downtown is similar with very few available and the majority being smaller, older homes in outlying areas of Downtown.
- Gulf Breeze schools are among the highest rated; that's why there's less than 20 properties for rent in the area with only four rentals in Gulf Breeze Proper and nothing available on Pensacola Beach. The average rental rate in Gulf Breeze is currently $1,700.
- As we approach PCS season, we see limited availability especially nearby the back gate of Naval Air Station. Expand your search area.
- Come prepared! We see great applicants miss out on homes every day as we are getting multiple applications on the most desirable properties. Be flexible and available for open houses and showings. Be sure you have your deposit ready when you apply.
- Have a folder with the following documents ready for when you find the right house!
- Driver's license copy for all adults over 18 residing in the property
- Pay stubs or income verification for at least one month. Have all forms of income available and documented for each adult.
- Photos of any pets you may have
- Previous landlord information including phone and email address. Better yet, ask your current landlord for a letter of recommendation stating your rental rate, dates of residency, and contact information.
- Have a folder with the following documents ready for when you find the right house!
- Be weary of scams. Unfortunately, people like to take advantage of others when inventory is low. Never send your personal information via email or send money overseas without verifying. Craigslist scams are common and scammers are smart about their scams. They even create email addresses to mirror the actual owners name. This happens all the time so please be careful when leasing from owner, especially from out of state.
- Consider Purchasing. In 2011,the average rental rate was $960 per month. The average Pensacola rental is now over $120 more expensive per month representing a 13% increase in rents over the last four years. Interest rates are low. Talk to us about your options to own your own home! Unsure about whether you have the funds required to purchase? Look into first time home buyer bond and grant programs. If you want more information, contact our office or email me here.
Pensacola Rental Market Shortage
We are into peak rental season with below average inventory in the Pensacola rental market. The Pensacola rental market picks up drastically in February and March and peaks in July and August. The market slows drastically over winter with the slowest month of the year being December.
Rental rates have been increasing since 2011 and have increased on average $120 per month over the last four years from $960 per month to an average rental rate of $1,080 per month.
- The average list price for a 3 bedroom 2 bath in the Pensacola metro area is $1,144.
- 3% are over $1,000 a month (179) and 47% of those under $1,000 per month (158) .
- The least expensive 3 bedroom 2 bath home is $750 and the most expensive is $2,295.
- There are 338 rental properties on Pensacola MLS. This is just at one month's inventory for a typical March.
- 221 properties are located in Escambia County (Pensacola, Cantonment, Perdido Key, and Pensacola Beach) and 106 in Santa Rosa County (Pace, Milton, Gulf Breeze, and Navarre)
- Of these, 237 are single family homes, 19 are condos, 68 are town homes or duplexes/apartments, and 8 are mobile/manufactured homes.
Last week, areas of Northeast Pensacola and Milton were affected by tornadoes in the Pensacola area. The week before, a tornado devastated the town of Century in Northern Escambia County, Florida. The Pensacola News Journal reported over 170 houses with "major damage." A lot of these renters and homeowners have been misplaced. This puts further stress on the Pensacola real estate market, especially the rental market as these misplaced homeowners seek a rental property. Supply and demand always affects pricing and of cousre, home prices typically peak in the summer months as competition is more intense.
It will be hard summer to nail down your "perfect dream home" whether you are looking to rent or purchase! Make sure to sign up for new rental alerts and enlist the help of a real estate agent if you hope to purchase a home.
Nicole St. Aubin, Broker Associate
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