5 Successful Ways for Selling a House With Tenants in 2020
Even though the information on this web page is provided by a qualified industry expert, it should not be considered as legal, tax, financial or investment advice. Since every individual’s situation is unique, a qualified professional should be consulted before making financial decisions.
Is It Possible to Sell a House With Tenants in It?
So, you’re thinking of selling your home that you’re currently renting. However, with a tenant living on the property, the selling process can get a little hectic.
Fortunately, there are several ways one can sell their home in this scenario.
Whether you plan to sell your home because you’re relocating, want extra cash, or for other reasons, selling it is definitely possible.
The idea of having a tenant may feel like there’s a roadblock on the selling process, but it can be possible.
Who Are Tenants?
As a little background information, a tenant or lessee is one who leases a home, condo, apartment, or other property from a landlord.
A landlord, the lessor, is the one who owns the property for rent. Tenants must abide by specific rules and pay their rent on time to continue renting, and living, in the property.
Both landlords and tenants have restrictions, but as a landlord, you can regain control over your property.
Month-to-Month Agreements Versus Fixed-Term Leases
It’s important to discuss the two types of rentals landlords may charge tenants: month-to-month agreements and fixed-term leases.
Simply put, a month-to-month agreement is a short-term commitment in which you only need to notify your tenant 30 days prior to selling your home or other property.
In this Scenario, this is the Simple Process you Must go Through to Sell Your Home:
- Notify your tenant via letter (with a date stamp) of when you plan to terminate them. Legally, you must allow 30 days or until the next rental date depending on the laws in your specific area.
- Kindly ask your tenant to pack their belongings and return the keys to the property on or before the date mentioned in the letter.
- Start the eviction process if the tenant fails to move out by the desired date.
However, when it comes to fixed-term leases, this could make the selling process more complex for landlords.
Here’s How You Can Sell Your Fixed-Term Property with a Tenant:
1 Wait for the Lease to Expire
Of course, the simplest and least aggressive ways to sell a property that is being rented is to wait for the lease to expire.
The timeframe may be long or short depending on when the lease is over.
However, if your tenant has violated lease terms, you can legally terminate the lease sooner without them having to agree to it.
Some of the Violations may Include:
- Failure to pay rent on time
- Having pets in a no-pet agreement
- Subleasing to others (if contained as a violation in the leasing agreement)
- Putting false information on the lease agreement
- Damaging rental property
- And so on
With that being said, it’s important that you know your rights as a landlord and take advantage of the power at hand if violations do occur.
2 Agree on an Early Termination
Asking your tenant to terminate the lease early is something that has to be both agreed on by you as landlord and the tenant.
If one does not agree, early termination will not work, and another method will have to be put into play.
Notify your tenant regarding potential for early termination, which may be agreed upon within a certain timeframe.
This will help shorten the rental agreement, allowing you to sell the property sooner.
3 Sell the Property While the Lease Is Still Active
Probably one of the more difficult to negotiate option, and maybe not the best, would be to sell the property while your tenant is still living there.
It’s important that you notify your current tenant that there is someone who has bought the property and will be living with them.
Likewise, the buyer must agree to the tenant’s rental term until it expires.
However, first and foremost, the buyer will not purchase the home to begin with if they aren’t up for the idea of living with someone else.
Of course, after the rental agreement is terminated, the purchaser of the property can live their life peacefully.
Still, your options to find someone to purchase your currently-rented property are limited and may limit the time in which you can sell your home.
4 Pay Your Tenant to Give Up the Rental Agreement and Move Out
In times of desperation and in which your tenant refuses to agree to an early termination, you may consider paying your tenant to leave.
This offer can be anything, but it’s important to keep a few things in mind.
You may want to make an offer that would cover all or part of the security deposit for their new rental.
Another idea would be to offer money to pay moving costs. Additionally, you may pay the difference of comparable properties or pay back the remaining months’ rent for the term.
This last option may be most reliable and fair. For instance, if you charged your tenant $7,000 a year for rent but ask them to move out at six months, you may pay $3,500 to make up the difference.
5 Consider Selling the Property to Your Current Tenant
Probably one of your first options, but probably not the most reliable in terms of it working, would be to try to sell the property to your tenant.
This will work if your tenant is attached to the property and has the money to purchase the home, however. In the case that they can’t afford it up-front, you may agree to a selling financing agreement.
This would allow the tenant to make payments over a short-term basis.
Generally, selling when you have a fixed-term lease with a tenant is not impossible, but it may be harder than selling one with a month-to-month agreement.
Landlords ready to sell their once-rented property have a few extra steps to face when a tenant is currently renting.
On the bright side, a month-to-month rental can be permanently ended by sending a letter to your tenant asking for termination of the rental agreement.
Your next step if the tenant does not leave is to begin eviction. On the flip side, a fixed-term property is more complex to deal with when you’re wanting to end the agreement with your tenant.
In this scenario, there are typically five options at hand. These include: letting the lease expire, agreeing on early termination, selling with an active lease, paying your tenant to leave, or selling to your tenant.
In the case of waiting until the lease expires, the lease can be terminated sooner if the tenant has violated any lease agreements.
The many options at hand will make landlords confident that they can reject the current lease agreement and have the property sold soon.
In case you need to sell your house fast and in any condition, feel free to contact HouseCashin.com. We will buy you house ‘As Is’ for cash.