Are you planning to sell your rental property while it is still occupied by a tenant? If that's the case, you're already aware that dealing with tenants is a difficult task. Selling your rental home while it is occupied adds to the already complicated process.
But, can you sell a rental property with tenants living in it? Yes, you can sell a rental property that is occupied by tenants. It’s best to hire a Rental Property Management to assist you with the process.
Tips for Handling Tenants with a Month-To-Month Agreement
If your tenant rents on a month-to-month basis, selling an occupied property shouldn't be a problem as long as you provide the tenant with adequate notice. Proper notice is mailing or delivering a letter to your tenant 30 days before the day you want them to vacate, usually about the rent due date.
Tips for Handling Tenants with a Fixed-Term Lease
Your options are more complicated if your tenants signed a fixed-term lease. Selling an occupied rental property with a fixed-term lease needs more steps and does not automatically end simply because the property's ownership changes. Following are some ideas that you can use to deal with this issue.
1. Wait Until the Lease Expires
If you wish to sell your property, you might want to be patient and wait for the present lease to expire before doing so. This method necessitates some foresight and organization on your part. But, it relieves you of the stress of dealing with tenants. There are some important advantages to listing a rental home after the tenants have left.
To begin, the existing rental revenue will determine the house's value. If the renters vacate, you may be able to raise the rent, which will improve the property's worth. Another advantage of selling an empty property is that you will be able to undertake any necessary renovations, repairs, or improvements. That too without bothering the tenants.
2. Selling the Property to an Active Lease Investor
Selling to a real estate investor could be the ideal option for you if your tenant is current on their monthly payments. Also, has a preexisting lease or rental agreement. Real estate investors benefit from having a tenant in place since it saves them time and money from having to find a new tenant.
One thing to keep in mind is that selling the home to an investor narrows your pool of potential buyers. This is because you must sell to someone who accepts and knows that the property has a tenant. When you sell the home with a fixed-term lease, the lease transfers to the new buyer.
Also Read: When Tenants Want To Break Their Lease: A Guide to Early Termination for Landlords
3. Make a Deal with the Tenants to Move Out
Let's say you've found an eager and qualified buyer who is ready to seal the deal, but you need the home to be vacated. In that scenario, you should try to work out a deal with your renter. You can try to persuade them to vacate the premises before the lease expires. The first thing to keep in mind is that this will require the tenant's permission.
4. Sell the Property to your Tenant
What if your tenant is ecstatic to be a part of your rental property? Offering the occupied rental property to your current tenant is a simple approach to selling it.
