Selling a House With a Tenant Living There: What Are Your Options?

Are you selling your rental property with a tenant still living in it? If so, you already know that dealing with tenants is a complicated affair. Selling your rental property with tenants adds more complexity to an already elaborate process. The United States has seen surging rental real estate trends surrounding this issue. 



Most notably, the ongoing shift to remote working has caused rent growth to shrink in metropolitan areas and skyrocket in suburban markets. In recent years, rents have been growing at a brisk pace due to low rental vacancy rates and an increased demand driven by expensive new home builds. (1) Here’s what you should know about selling a house with renters living in it.

Is it Possible to Sell a House with a Tenant Living in it?

You have every right to sell a rental property while tenants are still living there. The process may be more awkward than if you were the one living in the home, but selling the home is perfectly legal as long as you follow the rental agreement terms and do not try to force the renter out when they have a right to stay.

Fixed-Term Lease

If you issued a fixed-term lease to your renter that did not include an early termination clause, your renter has the legal right to stay in the home until the lease expires. The renter must continue paying rent and must ensure they don’t violate the lease agreement. You can begin the selling process before the lease expires, but the renter can only move out after the agreement expires, which is when the buyer will move in. 

Month-to-Month Lease

A month-to-month lease provides the most flexibility for both renters and landlords. Precise timeline demands will vary depending on the city and state in which your property is located. However, with a month-to-month lease, you usually only need to notify the renter to leave your property a month or two before the moving date. In many cases, landlords are not required to notify month-to-month tenants of the reason for the lease termination. 

However, if you want to sell the house while the renter is still living there and need to arrange inspections, appraisals, or open houses, it is best to keep them informed.

Your Options if the Tenant Refuses to Leave

If your tenant refuses to move out so the new buyer can move in, you will have the following options.

Sell to an Investor

If you’re selling an investment property, it doesn’t mean that the buyer doesn’t want to rent it out. In this instance, you can find a Milwaukee cash home buyer. A cash home buyer Milwaukee can continue renting the home out to the same tenant. The we buy houses, Wauwatosa companies usually buy properties in any condition they’re in and then fix any repairs. 

They then continue renting the property or sell it after a few years. 

Pay your Tenant to Move Out

This may be your least preferred option, but it can help speed up your timeline with a burdensome tenant. You can offer your renter money to get them to leave sooner than they want to. You can offer to pay their moving expenses or refund a month’s rent to see if they will agree to move out. 

Sell to the tenant

If your tenant decides to buy the house, they are not required to leave. If they make a reasonable offer, you can save a lot of time and energy looking for a buyer. Give them the option to buy the house before you put it up for sale when you decide to sell. You are not required to accept their offer, but it is always nice to have options. 

This is a great way to sell my house fast Wauwatosa. 

The Pros of Letting the Renters Live in the Home During a Sale

• The house has already been staged. While tenants are still living in the home, you won’t have much control over staging, but a home with furniture is generally easier to sell than an empty home. According to NAR, 82% of buyer’s agents believe that staging helps buyers visualize a home as one they can call their own.
• Real estate investors find it appealing. If you decide to sell the property to another investor, it will be more appealing if they don’t have to find new tenants.
• You do not lose money. If you show the house while the tenants are still paying rent, you can continue to earn rental income until the house is sold.

How to be Thoughtful to Tenants when Selling

If you decide to sell the house while it still has renters living in it, consider the inconvenience the sale will cause them. A rented home should not be treated as a normal sale. For example, you should not put for sale signs in the yard to attract potential buyers who may want to come in and look at the house, as this will cause disruptions for your tenant. You should also try to keep the number of showings to a minimum. 

Instead of doing private showings, hold open houses where multiple potential buyers can stop by. Further, because you want your tenants to leave during open houses, you should give them prior notice and confirm that the open house works with their schedule. You can go above and beyond by giving them a gift card to a local restaurant, so they have somewhere to go during the open house.

Endnote

Selling a home with renters requires a little more effort than selling an unoccupied home or one in which you live, but it is very doable. If you need to sell your property quickly, you can hire a real estate agent to guide you through the process. The various options discussed above can assist you in navigating the process, and you should carefully consider which option will best work for you and your tenant. Remember, violating your tenant’s rights during the sale process can significantly delay the entire process.