Real Estate

Price difference selling a tenanted home vs vacant one in Toronto (leslieville)

  • Last Updated:
  • Jun 1st, 2021 9:05 am
[OP]
Deal Expert
User avatar
Jan 27, 2004
48348 posts
11636 upvotes
T.O. Lotto Captain

Price difference selling a tenanted home vs vacant one in Toronto (leslieville)

What do you think the price difference is when selling a home tenanted (tenant paying below market rent) vs vacant?

The market area is Toronto , Leslieville. On a quiet side street near schools and shopping. Desirable area.
The home is a detached 4 bedroom with basement apartment.

*** anyone know what the difference could be? Even if its a rough estimate?
5% ? 10% ?
Last edited by UrbanPoet on Oct 30th, 2020 3:02 pm, edited 1 time in total.
11 replies
[OP]
Deal Expert
User avatar
Jan 27, 2004
48348 posts
11636 upvotes
T.O. Lotto Captain
FARMERBLANCHE wrote: $0 if the buyers are moving in
Does that consider the fact that it would rule out the following pool of buyers?

1. People who want to live in and rent out the basement for additional income

2. People who want a duplex as an investment property, but unwilling to accept a tenant paying below market rent.
Deal Addict
User avatar
Jan 2, 2012
4223 posts
2213 upvotes
Toronto
UrbanPoet wrote: Does that consider the fact that it would rule out the following pool of buyers?

1. People who want to live in and rent out the basement for additional income

2. People who want a duplex as an investment property, but unwilling to accept a tenant paying below market rent.
There is also a concern that tenant may not want to move even with an N12 presented, forcing need to go through LTB and official eviction process. This could possibly delay the closing date if new buyers need an empty property, or force deal to collapse.

If I was a buyer and needed a home for personal use by a firm date, I would be hesitant to buy any tenanted property these days.
Deal Addict
Feb 19, 2019
1569 posts
2355 upvotes
Stouffville ON
Yes there could be a difference, vacant home is easier to show, easier to stage, easier to keep presentable. Buyers have no worries about vacant possession.
I have had few cases where we had scheduled the showings 24 hours in advance and the tenant still wouldn't let us in, it doesn't happen very often but it does.
Full Time and Full Service Realtor
Deal Expert
Feb 29, 2008
17299 posts
14692 upvotes
Tarrana & The Ri…
Depends. Are your tenants nasty? Are they difficult? If so the answer is obvious.

The challenge these days is will thry be willing to allow people to look at the house.
? I know someone with a tenant who has been very difficult. They won’t allow anyone to view the home due to COVID (which I don’t blame them).

Selling an empty home removes a lot of headaches.
Deal Addict
Jan 20, 2012
1020 posts
657 upvotes
Toronto
Sold my property last month. It was hard to sell with tenant occupied. Buyers afraid that tenant doesn't want to move out or new investor unable to rise rent with lease takeover. House was in the market for 60+ days while everybody sold under 10 days in the same area. House relisted after tenant moved, Sold in a week at market price.
[OP]
Deal Expert
User avatar
Jan 27, 2004
48348 posts
11636 upvotes
T.O. Lotto Captain
Inclemental wrote: Sold my property last month. It was hard to sell with tenant occupied. Buyers afraid that tenant doesn't want to move out or new investor unable to rise rent with lease takeover. House was in the market for 60+ days while everybody sold under 10 days in the same area. House relisted after tenant moved, Sold in a week at market price.
Any updates?
Anyone else would like to share their experience?
Deal Addict
User avatar
Nov 30, 2005
1811 posts
1399 upvotes
Ottawa, ON
As I buyer, I wouldn't even touch a property that I intend to move into that has a current tenant, too much risk for me.

However lets put that risk to the side for a moment to try and answer your question, I would say it would like sell for 10-15% less as it likely wouldn't show as well and maybe the reduce showing opportunities if tenants are not flexible. Also buyers believes tenants don't take good care of these homes so that will also be factored into their offering.
Deal Addict
Mar 2, 2017
2868 posts
5375 upvotes
Toronto/Markham
This depends on a few things.

You are assuming the tenant at closing
The tenant is an 'ok' tenant with at least 700+ credit score/solid employment/etc

That said, I sold a listing recently with a fixed term tenant in the unit and we left about 2% on the table because of it (in demand area, had a bidding war).

Leslieville it will be similar, don't expect a deep discount, stuff is moving quickly there and people are willing to take on the risk. The discount will usually be a reflection of the tenant risk profile.
Realtor®
Deal Addict
Nov 13, 2013
3008 posts
1706 upvotes
Ottawa
Only the basement is tenanted? Not very much. Most people buying this want to rent it out and probably prefer or at least are neutral to an already established tenant. You will have some who will bid less because the numbers don't work with a lower rent but not sure how many that will be.

I guess the crux of your questions is how much is it worth bribing them to leave on their own. An empty unit also a risk for some who have to worry about finding someone or wonder why it's empty. I don't think it's worth it in this case.
Deal Guru
Feb 22, 2011
11488 posts
14742 upvotes
Toronto
Probably no difference for a detached there. I saw a tenanted house in the beaches get sold in a couple days for market value even with tenants and the place being in disarray.

Most buyers there know what they want and it's size/land they probably don't care as much about details.

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)