The strong seller’s market has prompted homeowners across the country to
consider selling their homes. What if your property is a rental unit with tenants in
place? Can you still sell and take advantage of the rising home values? Yes, by
understanding the steps and following a few tips, you maximize your profit in this
strong market.
The first step in selling your home with tenants in place is to understand your
rights and responsibilities. The kind of lease you hold will determine if you can
simply give notice to the tenants or if the new owners will buy the home with a
lease in place. Only month-to-month leases can be terminated unilaterally with
proper notice.
Next, meet with the tenants and discuss the situation. Explain your reasons for
selling and assure them that you wish to make it as easy as possible. Offer to sell
the home to the renters first, and then discuss any future plans they may have. If
they can’t or don’t want to buy the property, you may be able to offer them
money to move. Your goal must be to have the cooperation of your tenants so
they will help facilitate showings and maintain the home.
When you have tenants, who will remain in the home after the close due to their
lease, then you must disclose the lease terms to the buyer. The new owner will be
legally obligated by the lease. In a strong market, you may find a buyer willing to
wait for the expiration of the lease, even if they intend to occupy the home.
Selling with tenants in place doesn’t have to be difficult. Do your homework,
understand your obligations and be transparent with the renters and potential
buyers. This way, you make it easy on all parties and can reap the reward of high
home values.
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