Investing in real estate is one of the wisest financial moves you can make.
You can make a lot of money renting the property to tenants. Not only will their rent cover your costs, but you’ll also be able to pocket hundreds of extra dollars a month.
But what if you’re tired of being a landlord or you have an interested buyer looking at the house? Is selling a house with tenants an option?
What rights do you have as the property owner? What rights do your tenants have?
We’re here to help clear things up. Keep reading for five quick tips on how to sell a house with tenants.
1. Make Sure Tenants Know the House Is Up for Sale
Ideally, before you allow tenants to move in, make sure they know the house is actively for sale. This will help you avoid difficult (and possibly confrontational) issues in the future.
If your property is for rent, this literature must be included in your lease agreement. Then, if the time comes, you will have the legal standing to sell the house as quickly as you want.
2. Only Provide Month-to-Month Contracts
Alternatively, if you’re planning on selling a house that you’re also renting out, only provide month-to-month contracts for your tenants. Yes, there’s less income security for you, but it will make it much easier to sell the home if you have an interested buyer.
The tenant can renew their contract each month until the house sells. At this point, you can legally terminate the contract.
Additionally, if something comes up and you need to sell the property immediately, you won’t be obligated to wait out a long-term lease agreement. Then, you can sell your house in a matter of days to a cash home buyer, like URB.
3. Sell to the Current Tenant
Sometimes, tenants fall in love with the home they’re renting. Therefore, try selling a house with tenants to the current renters.
Assuming they are in a financial position to buy, they might be your best option for selling. They are already moved in and won’t have to uproot their lives. If you have an interested buyer, give them first dibs on the home.
4. Negotiate With the Tenant
However, selling a house with renters won’t always be as easy as selling to the current tenants. They may not be financially capable or preferentially inclined to make a permanent commitment.
If they’re in a fixed lease with several months left on the agreement, you can always offer them an incentive to move out early. This could mean giving them their deposit back regardless of the final inspection, covering their next rental deposit, returning their last month’s rent, paying their moving costs, etc.
5. Include an Early Termination Policy in Your Lease Agreement
If you know you eventually want to sell your rental property, it’s best to plan ahead. As noted above, this might mean doing month-to-month agreements.
However, if you want more income security, you can do long-term leases but include an early termination clause based on the sale of the house. As long as it’s included in the lease agreement and the tenant signs the contract, you can sell the house at any point.
Need Help Selling a House With Tenants?
Are you thinking about selling a house with tenants? If so, follow the tips listed above for your greatest chances of success. Remember, it’s your property, buy your current renters have rights too.
And if more real estate advice is what you’re after, stick around for a while and check out some of our other articles. Browse through our real estate section to find more valuable tips and insight.