Can You Sell Your Rental Property With Tenants?

Believe it or not but over the years we’ve heard this question, “Can I sell my rental property with tenants in it?” a lot from sellers and landlords looking to offload or sell their rental for different reasons. In this blog post, we answer this question in details and provide actionable tips for selling a property with existing tenants.

“Within hours after submitting my home information on their site I got a call back and an offer to my house. I ended up selling the house 2 weeks later. Thanks for taking the time to listen to my concerns and guiding me through this stressful time in my life.”

Daniel

Aurora, CO

Can I Sell My Rental Property With Tenants In It?

While selling a house with tenants in it isn’t the best selling scenario in most cases, it can be done. The U.S. real estate market is governed by laws that give tenants certain rights, including the right to stay in a rental up until the rental agreement or lease expires. However, this doesn’t stop a property owner from selling their property.

What’s more, your right to sell property occupied by a tenant shouldn’t be mistaken to mean it is a great idea. Tenants usually complicate the process of selling a cottage, condo, home, or other property. This article highlights what you should do to make the process simpler.

“Fantastic Company, they were there to answer my many questions and they work quickly to resolve some lien issues that came up before closing. I will continue to use them in the future and also refer my friends and family to them.“

Julie

Centennial, CO

Tip 1: Understand the Current Lease Agreement & Applicable State Laws

The first step when selling a home with tenants in it is to understand what the rights of your existing tenant are under the rental/lease agreement. State laws can also give tenants additional rights. You must understand what those rights are before commencing the sale. There are generally laws regarding notices to vacate, if you require your tenant to leave.

Most tenant leases are either month-to-month or fixed-term. A month-to-month lease generally requires a 30-60 days’ notice in most states. Your right as a landlord or property owner to show property while your tenant is still living there usually depends on the existing lease agreement. Fixed-term leases which have early termination clauses allow tenants to be vacated with a proper notice. You can consider other options i.e., wait for a tenant to violate existing terms before you terminate their lease.

Tip 2: Involve Your Tenant. Ask If They Are Interested in Buying

Once you understand the legal rights, you can proceed and begin your sale. However, you can save yourself a lot of trouble by involving your current tenant from the start. Securing a property buyer isn’t easy in most cases. If your tenant is interested, they’ll save you precious time and effort. You can work with a real estate lawyer to handle the sale agreement.

If your tenant isn’t interested, talking to them will still help. You can request for their cooperation during the showing. Current tenants are capable of sabotaging your sale. Involving them reduces the odds of such occurrences.

Tip 3: Negotiate For a Move-out

In some cases, the tenant may have an upper hand based on the state laws or the agreement they signed with you. You can negotiate to give them an incentive to cooperate with you. Assuming it is better for them to vacate the property before you sell and their lease doesn’t expire in the near-term, you can offer to cover their moving costs, or offer a payout to cater for the inconvenience. This route should be considered when it makes financial sense to do so i.e., when you are certain you’ll recover the cost after selling.

Tip 4: Set Convenient Showing Times

If selling your house while tenants are still present doesn’t hurt your prospects, you should find an ideal showing time that works for your tenant, yourself, and potential buyers. Ideally, you should plan to give your tenant at least a day’s notice before a showing or within the agreed timelines.

Respecting your tenant’s time and wishes can determine if you’ll have a successful showing or not. Giving adequate notice can ensure the home is ready for staging, which increases the odds of selling.

“I honestly never thought that selling a fire damaged house would’ve been so easy, fast and stress free..”

Charles

Denver, CO

Tip 5: Seek Professional Help

While you can sell a home with tenants in it without seeking any professional help, professionals can help you go through the complex home sale process. For instance, you may need a real estate attorney to craft a sale agreement if your current tenant decides to buy. A seasoned real estate agent will also know how to minimize the cons of staging and showing a home that is currently being occupied. Real estate agents can also find suitable buyers faster from their own connections.

The above tips on how to sell a tenant occupied rental property summarize the most important considerations to make when selling a house with tenants. The tips will limit your exposure to liability, save you precious time and money, and guarantee a smoother, stress-free process. The above information eliminates most, if not all, potential problems linked to selling property with tenants.

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Jennifer

Aurora, CO

“It was the easiest sale I’ve ever made. The offer was fair and I didn’t have to do anything. I’ve recommended it to a couple of friends.”
Pierre Villalobos

“I had an excellent experience, and recommend any person that needs to sell, to call them. I have no complaints. Everything I was told it was going to happened, it happened. Exact date, like I was told. Thank you!”

Peter Smith

“I wanted to take the time to thank you and your team very much for the purchase of my mother’s home. You guys kept things simple and to the point, and closed in a short period of time, which made my mother feel at ease with the whole situation. Thank you again for all your hard work and making everything come together quickly!”

Richard Williams


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