Selling a rental property that has tenants can be an asset that makes your home more attractive to buyers or it can become a liability that affects your sale price and ability to sell the home. This greatly depends on the relationship you have with your tenants and if the tenants have shown to be responsible in paying rent and keeping the property in good condition. You have several options for how to work with the tenants selling your rental. Take into consideration the need to be courteous to your tenants and making your property have the most value to potential buyers when deciding how to sell your property that is tenant occupied.
Give your tenants 30 to 90 days notice, depending on your state tenant laws, to vacate the property if the lease has expired or the tenants are renting month to month if you do not want to show and sell the house while occupied. You can also buy out your tenant’s lease out if the lease will not expire in this time frame. You may want to do this if you feel the tenants may cause problems with allowing potential buyers to see the house or with keeping the house in show condition. Then list the house for sale when it is empty.
Offer a First Right of Refusal to your tenants first before putting it on the market. A First Right of Refusal gives your tenants the first opportunity to buy the house even if another offer comes in. When you offer a First Right of Refusal, you can still put your house on the market. If you get an offer to buy the house, with a First Right of Refusal in place, your tenants then have the option to decide if they want to buy the house at the same price and conditions as the offer you received. If your tenants decline, then you can accept the outside offer.
Put the house on the market with an agreement with your tenants that if the house sells, they may or may not have to move depending on the buyers. You can do this if you or your tenants do not want to enact a First Right of Refusal. List the house as tenant occupied, as this may attract investment buyers who want to buy a home with good tenants already living there. Since showing the house will be an imposition on your tenants you may want to offer an incentive for your tenants to keep the house is show condition. Consider offering to pay for a lawn mowing service and weekly housecleaning or a deep discount on the monthly rent while the house is up for sale.
Lynn Anders has more than 15 years of professional experience working as a zookeeper, wildlife/environmental/conservation educator and in nonprofit pet rescue. Writing since 2007, her work has appeared on various websites, covering pet-related, environmental, financial and parenting topics. Anders has a Bachelor of Arts in environmental studies and biology from California State University, Sacramento.