"Can I sell my rental property with tenants in it?" This is a common question many landlords face at sometime or another. The answer is yes, but it is a bit more complicated than a regular, straightforward sale. The property is yours and you have the right to sell it, but your tenants are an extra variable in the sale that must be considered.
Should I sell my tenant occupied rental or end the lease?
You don’t have to kick your tenants out of the house before you sell it. In fact, it may be illegal to terminate their lease if you don’t have a good cause. If you want the house to be vacant before you sell it, the best thing to do is wait until the lease ends and start the selling process after the tenants move out.
You could also offer the tenants an incentive for moving out early, such as paying for their deposit on their next place or paying the difference between their current rent and average rent on a comparable size property for the remainder of the months on their contract.
If you don’t want to wait until the lease is up or offer an incentive for your tenants to move out sooner, you can also put the house on the market while your tenants are still living in it. You need a good relationship with your tenants for this to work, because an uncooperative tenant can easily prevent a house from selling.
Selling when tenants aren’t going to move
Most of the time, it is assumed that tenants are going to move out of the house when the house is sold. However, this is not necessary. You can sell your rental to an investor who wants to continue renting the property out, in which case the terms of the lease will simply transfer over to the new owner. This is a method of selling that offers stability to the tenants and doesn’t require them to move. The only drawback is that you will be more limited in your potential buyers.
Pros and cons of selling your rental property with tenants present
Tenants can actually help your property sell, if they are cooperative. Houses sell best when they look lived in, and your tenants can help prospective buyers envision themselves living there. On the other hand, they can also make the house look terrible and hold up the selling process if they don’t want to move.
Remember that your tenants see your house as their home. Be respectful of them and show you recognize the inconvenience that selling the house causes them. Educate yourself about local tenants’ rights laws. With a good relationship with your tenants, selling your rental house with tenants still living there can be an easy and good experience.