To sell or not to sell? That is the age old question that many property owners face whether they are looking to offload for bigger and better things, or they simply want to get out of the tenant/vacancy/rising costs/repairs cycle.
Depending on your market, it may make sense to sell your rental property, especially if you have a ton of equity in your house.
Selling your home with tenants in place can get tricky. You will want to make sure you keep clear communication with everyone involved since there will be lots of moving parts.
When selling your rental property with tenants in place, there are a ton of considerations. Let’s dive in to the pros and cons of why you should sell your rental property with tenants.
Option 1: Sell Your Home with Tenants in Place
Selling your home with tenants in place can help your house attract investors who want to sell and close fairly quickly. However, if you have tenants that are slightly problematic, or the home is in need of repair, your chances of selling your rental property could be slim. Selling with tenants in place have pros and cons you may or may not have thought of.
Option 2: Wait for The Tenants’ Leases to Expire Before Selling Your Rental
Waiting for your tenant’s lease to expire before selling your home could alleviate a ton of headache for you, your buyers, and your tenants. You wouldn’t have to work around anyone’s schedules and the house would be in great showing condition. That could also mean you aren’t receiving any mailbox money while your home is on the market.
Pros:
You Are Able to Make Repairs and Possibly Sell for a High Price
If your tenants have moved, you are able to fix the place up a bit to make showings a little more enticing. You could repair broken items that have needed to be fixed and you could also force some value in the equity by painting or adding updated fixtures.
This could help increase your sale’s price and days on the market. Buyers will typically be happy that they have a 100% turnkey rental that they can rent out for a higher market rent.
Close Faster
Without tenants in place, a landlord could typically close on the property faster. A buyer would be able to do his due diligence faster because he would have access to the property at his speed.
There would be no need for transferring leases and security deposits. Depending on your state, you wouldn’t have to worry about laws pertaining to removing your tenants on time.
Cons:
Holding Costs
If you are selling your rental property without tenants, then you are not receiving your monthly cash flow. You could be out of pocket for thousands of dollars if you still owe a mortgage depending on how long it takes to sell.
We Can Help!
If you are thinking about selling your home, but want to move fast, we can help you receive an all cash offer in as little as 14 days! This way, you don’t have to worry about showings, closing costs, or repairs! We will even keep your tenants in place!
If you are interested in still receiving your cash flow, but want to sell your rental property, we can help you with that too! Schedule a FREE consultation to talk about your options.
Determine Your Exit Strategy Based on the Lease
You should always examine your tenant’s leases to determine the best action to take regarding selling your rental property. Be aware of your state’s laws to make sure you are creating a smooth transition from you to the buyer.
The type of moves you can make heavily depend on your tenant’s leases.
Month to Month
If your tenants are renting month to month, you must give them a 30-60 day notice to vacate depending on your state. You may make an agreement with them to show your rental property while they are still residing in the home.
Fixed Term Lease
Unless you have an early termination clause in your lease, chances are your tenants have the right to stay until their lease is up. If your tenants have broken any clauses in your lease, you are entitled to evict them, but that could cause another huge headache.
We are here to help you sell your rental property regardless if there are tenants in place or not. We will give you multiple solutions and exit strategies no matter if your tenants are month to month or on a fixed term lease. Give us a call or schedule a FREE consultation to see your options.