There are still many “default landlords” about the country and many right here in Orlando and across central Florida. These are homeowners whose home values took a hit during the national financial downturn and are recovering. In addition, there are many others who have relocated and are long distance landlords. Regardless of the reason, these homeowners are also landlords, choosing the option to rent their properties rather than sell at a loss. Now, it’s time to move on and because it’s occupied, you’re wondering how to sell a rental home with tenants.
How to Sell a Rental Home with Tenants
There’s a lot that goes into selling a home, and, it becomes a little more complex when the owner is also the occupant. Even though you’ve never had to deal with a broken lease, selling a rental property with a tenant is a bit tricky. This of course, is because you are not living in the home and hence, do not have complete control. A tenant can be a real plus or a negative, depending on who you’re dealing with.
“As the real estate market continues to recover in many parts of the country, millions of homeowners will consider getting back in the market, after unsuccessful attempts just a few years ago. When they couldn’t sell their home, many owners became what we call “accidental landlords.” They were forced to rent the home because they had to move. As home values increase, the option to sell becomes a reality. But this time, they’re trying to sell a tenant-occupied home. A tenant can make or break your sale. You have to plan well in advance, and communicate openly with your tenant for the sale to be a success.” —Zillow.com
On one hand, it shows the home is rentable and is able to generate an income stream. On the other hand, at the very least, it can pose an obstacle to get the home into salable condition. If you need to sell your rental property even though it’s occupied by a tenant, you should know some ways of how to sell a rental home with tenants:
- Meet with your tenant and explain the situation. If possible, you should meet in person with your tenant and explain that you’re going to sell the property. Don’t make the mistake of waiting until you have an interested buyer and springing the news on your tenant.
- Ask your tenant for help with selling the property. The very best and proactive step you can take is to enlist the help of your tenant in selling the residence. Let them know what’s going on and make an agreement to let real estate professionals show the home to potential buyers when needed.
- Give your tenant an incentive or two for their assistance. There are some ways to incentivize your tenant so you can get the most sincere help from him or her. Offer a bonus for help selling the home. You can also offer money for moving to your tenant when the house sells.
- Get the property into salable condition and ready to show. When you have your tenant in-the-loop and ready to lend a helping hand, you need to get the property into salable condition. A fresh coat of interior paint, an exterior pressure washing, some landscaping, and having your tenant declutter, depersonalize, and disinfect will be great steps to take.
- Market your rental property as occupied, with a paying tenant. You tenant can be a big plus to potential buyers, because it clearly demonstrates it is rent worthy and is generating a revenue stream.
If you aren’t comfortable with any of the above suggestions and would rather sell the your rental property when it’s vacant, you can simply wait until the lease expires. Of course, you’ll still have to give your tenant notice that you are going to sell the home and not renew the lease. If you need any help with marketing your rental home, just contact me and I’ll be happy to assist you.