Things To Consider When Selling Your Occupied Rental Property
Are you looking to sell your rental property with a tenant still living in it? If the housing market is prime for sellers or you’re looking to move on, selling your property isn’t as cut and dry as posting a sale sign in the yard if your tenants are still living there. Here’s information about the right way to proceed.
Reviewing the Lease Contract
The first thing you need to do is learn more about the current status of your tenant’s lease. Determining if the lease is month-to-month or long-term impacts the best way to approach a sale.
If your tenant is currently on a short-term lease, this gives you more flexibility.
- If you want to sell the home as an investment property, you need to let your tenant know that you are selling the house and then work with the new buyer to keep your tenant in place.
- When you choose to sell your home unoccupied, you legally need to give your tenant adequate time to move out, usually a minimum of 30-60 days.
When your tenant is still in the middle of an extended contract, selling the home is a bit more tricky. While an investor may see purchasing a property with a reliable tenant as a good option, others may not be interested in buying an occupied property.
- If you choose to market the home as an investment property, many state laws protect the tenant, and the new owner must respect the terms of their lease.
- You can wait until the lease expires and list the property at that time. This doesn’t always work if you need to sell quickly and the lease has many months left.
- You can negotiate with your tenant to move out early, offering money to help with relocation and early return of their security deposit for use on their new property.
One of the most significant opportunities to attract buyers is to have an open house or set up individual home showings. When someone else is living in the home, though, this can be a much trickier process. A tenant lives in the house every day, and their priority isn’t to make the home look nicer, so you make more money. Here are a few things you can do to make this process easier for your tenant.
- Give at least 24 to 48 hours notice for a showing.
- Work with your tenant’s schedule.
- Offer to pay for a professional cleaner to come in and make the home look presentable before an open house or showing.
- Have a professional landscaper do the yard work at your expense, even if the tenant is usually responsible.
- Offer to let the tenant be at the walk-through or open house, as their belongings are still in the home.
When you sell your home, there are almost always items that need repair. Whether you want to do these projects before listing the home depends a lot on your tenant. If you sell it as a vacant home, wait until they are gone to do any repairs.
When you sell your home as an investment property and allow the tenant to continue living there, you have two options for repairs. Since this is an investment, marketing it “as-is” may be appealing to some buyers. Otherwise, you may need to get creative with your tenant to make this project feasible. If they are willing to stay with family or take a vacation, that is prime time to get a project done. However, if that is not the case, you need to be prepared to offer to put them up in temporary housing or have them refuse altogether.
A quality cdd banking will also help you a lot while selling your occupied rental property. your rental property while a tenant still lives there can be a challenge. Review these options and determine how you want to proceed.