Written By Souki Fournier | July 1, 2021 | 3 minute read
Selling your home can already be a complicated process, but listing a rental property with tenants living in it creates another layer of difficulty. If your house is outdated or damaged, but you need to sell your property fast and as-is, the situation becomes even more stressful.
Landlords must consider several different factors when selling an as-is, tenant-occupied property:
Managing properties and tenants is not for everyone. Landlords might want to sell a rental home for many different reasons. The sale might be financially motivated. You may want to cash out while the property has as much equity as possible, or perhaps you want to cut costs if the house has developed negative equity.
Some property owners might want to retire or enter a new line of work and exit the landlord business. You also may have inherited the property and have no interest in managing tenants altogether.
Before the property hits the market, you need to consider the following circumstances to determine whether selling a tenant-occupied property is the best choice for your situation:
Is your tenant renting month-to-month? As the landlord, all you or the new buyer are legally obligated to do is give the amount of notice required as per state law. If your tenant is leasing the property, consider the amount of time remaining in the lease. While a long-term renter might appeal to some buyers, a prolonged lease agreement might be a turnoff for other buyers if they plan to occupy the property themselves.
For buyers who cannot move in immediately or do not mind waiting to occupy the property, month-to-month renters would be a perfect match. Also, some buyers would be happy to purchase a rental property whose tenant's payments are up to date and whose lease agreement is in place. However, if you are selling a single-family that appeals to families hoping to move in sooner rather than later, having a renter might hurt your chances of attracting buyers.
Is the property located in an area with lots of renters, like a college town? If so, your listing will probably generate interest from potential investors and buyers who do not mind taking on the role of landlord. However, higher-priced properties typically attract buyers who plan to move right in themselves. These buyers are most likely not looking to invest in a rental property, and they do not want to shoulder a high monthly mortgage payment while waiting for a low-rent-paying tenant's lease to expire.
Your tenant's attitude and assistance can make or break the sale of your property. A renter who does not keep the house clean or respond to your communication could make scheduling showings and attracting buyers much more difficult. In terms of finances, a current tenant who is behind on rent or paying rent below market prices will probably be a turnoff for potential buyers.
Speaking of uncooperative renters, how should homeowners proceed when their tenants refuse to vacate the property? If you have a long-term lease agreement with a tenant who does not want to make an early exit, ending the tenancy can get complicated.
You can try to negotiate with the tenant, offering a financial incentive in exchange for early lease termination. However, if they ignore the new lease agreement and stay in the home after the sale, the buyer assumes the responsibility of evicting the tenant. In turn, the new owner could pursue legal action against you for eviction-associated costs.
If you fail to find common ground with your long-term tenant, you may have to hold off on the sale of your property until their lease expires.
Selling your rental property as-is with existing tenants can complicate an already complex process, especially if you do not have time for repairs and need to close quickly. When it comes to selling your tenant-occupied home, you do not have to deal with the stress of negotiating terms with problematic tenants or worry that your renter will keep the house clean and presentable for showings.
At Simply, we make the highest possible, all-cash offers for rental properties with existing occupants. No updates, no repairs, no showings required. Plus, zero fees are involved!
You can receive your offer today! All you have to do is enter your address, and within 30 seconds, we will let you know if we are interested in your property.
November 9, 2021
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