Owning a rental property can build your assets and provide a steady source of income. However, a time may come when you are ready to sell. You might be moving out of state, need to cash out on the equity, or simply want to remove the responsibility. But this can get tricky if you have tenants living in the building.
This guide will break down some tips for selling your property with existing tenants. By communicating effectively and respecting your renters, you can handle the sale without burning bridges or complicating the sale.
Communicate With Your Tenants
It’s generally best to talk to your tenants as soon as you decide to sell. Keeping them in the loop will prevent surprises and allow them to prepare for the sale. Tell them that you want them to be on board during this process and that you are available to answer questions. Many tenants will be understanding about your situation.
However, keep in mind that some tenants will be upset about the change. They may worry that their rent will go up and that there will be other major adjustments in the lease. Many renters will also be worried about having to move. Reassure them that you are willing to make the transition as smooth as possible. Open communication can help your tenants feel more prepared for the sale.
Wait Until the Tenant’s Lease Is Over
When you decide to sell while a tenant is still living in your property, you might want a clean break. In this case, it might be best to wait until the tenant is out of the house or apartment before you sell. Just be sure to give your tenant enough notice to find a new apartment. This could be anywhere from 30 to 90 days depending on your lease.
You could speak with your tenant and come to an agreement about them moving out. Some landlords will offer their tenant money to terminate the lease early, covering temporary housing or moving costs. Keep in mind that this process is generally easier if you only manage one or two tenants per building. If you own a large house split into three or more apartments, navigating multiple lease terms can be tricky.
Try to Sell While the Unit Is Occupied
You don’t necessarily need to leave your property empty in order to sell it. Some buyers might like the prospect of buying an occupied building since they will have an income stream from the start. Again, just be sure to communicate closely with your tenants about this change.
You should also hire a lawyer to navigate this sale. Most states require buyers to carry the lease and security deposit over to the next tenant. Be sure to include these terms in a sale contract, so you know that the buyer will allow your tenants to finish their lease term before deciding whether to move.
Accommodate Your Tenants’ Needs
Once the logistics are set, be sure to consider your tenants’ needs during the selling process. This includes giving them at least 24 hours notice before showings. You might also hire a cleaning service, so your tenant is not responsible for keeping the property clean while you are showing it to potential buyers. If you are doing any major repairs like renovating the kitchen or scheduling submeter installation through companies like FlowRite Metering, offer to pay for a hotel or schedule the work while they are out of town.
If you are asking them to move out, you can help them find another apartment or home to live in. All of this assistance maintains landlord-tenant relationships despite the inconvenience.
Hire a Local Service
If you find yourself Googling questions like “How can I sell my house in Los Angeles?”, you might consider hiring a professional to do so. A cash-for-homes service can get your home out of your hands quickly, while you focus on tenant relations. You can ensure that your tenant’s needs are taken care of while the sale processes. This can be ideal for landlords who are looking to move out of state or need to relocate on short notice. The sale can happen, and you can secure other accommodations for your tenants.
No matter where you are selling, there are plenty of ways to sell your property with existing tenants. Just be sure to communicate effectively, keep your tenants in mind during the sales agreement, and listen to any questions your tenants may have. Taking these steps will maintain your reputation as a landlord and keep your tenants happy.