If you are asking yourself “should I sell my rental property” then this article is right for you. We’ll consider the
Those who own rental properties know the dark side of being a landlord. Owning a rental can be a pain. Nightmare tenants, late rent, no rent, damage, carelessness, complaints, evictions, etc. If you are in this situation you might be wondering “can I sell my rental property with tenants in it?” The short answer is yes. Read on for more details.
The Reality of Rental Properties
Real estate investing is not all nice cars and riches. Being a landlord can be and many times is a tough business. Frankly, sometimes it’s a pain in the you know what. Our company has had homes with nightmare tenants ourselves; we feel your pain.
You can either manage a rental property yourself or pay a property manager, but both have their downsides.
If you are self-managing you have to keep up with and pay for property maintenance, collect monthly rent, deal with complaints and issues, etc. If you are managing your own property you know a lot of time, dedication and resources are required to effectively manage your property.
These headaches are probably why a whole industry of property management exists. However, there are cons of using a property manager as well. Paying costly property management firms and not knowing whether repairs are actually needed or repair costs are fair are a few of the issues.
Dealing with nightmare tenants over the long-term takes its toll on even the most veteran landlords. These issues may be worse if you are an inexperienced landlord or worse yet inherited a property you had no intention of having to deal with.
If you are sick of the stress and headaches, or you just have too many rental property it may be time for you to sell.
If you want to sell a rental property then selling to a cash buyer might be a good option. It is a lot easier than listing your rental with an agent, especially if it is occupied with a tenant. Selling to a cash home buyer means you don’t have to deal with any of the complications that tenants present.
Things to consider when you’re asking yourself “should I sell my rental property?”
- As the property owner, you may believe it’s simple to sell a home without tenant interference. But sometimes selling a rental property with tenants on a lease can be a complicated mess. Although you own the property, the tenants have rights too and they NEED to be respected.
- There are certain state restrictions that create roadblocks for the homeowner. If a landlord wants to sell before the lease is up, they can find themselves facing severe legal penalties with enormous monetary consequences.
- Selling a tenant-occupied property is different than selling a family home or an inherited property. As long as the tenant continues to pay rent, they have a right to live on the premises. While some tenants are worthwhile and make timely payments, others can be problematic, forcing a landlord to sell the property outright. When a landlord decides to sell, dream tenants can become nightmares for fear of displacement. It’s crucial to know your options and rights as a landlord as well as a renter’s rights and where those rights end.
- Instead of waiting months (or years) for the tenant’s lease to expire you can consider selling to a professional investor willing to take on even the most strenuous tenants.
At the most basic level you should answer the following questions:
- Do I get consistent cash flow from the property each month to cover all of my expenses and reserves for capital expenditures and future expenses?
- Is the hassle of being a landlord worth the cash flow I am getting?
Special considerations of selling a house with tenants still on a lease
When selling a rental property with tenants on an active lease, it’s important to know your state laws.
Some states requires you to give a 30 or 60 day’s notice, while others have laxer guidelines on the notice for a tenant to vacate. To uphold the laws of Ohio, you must send your tenant a letter that clearly states when their tenancy ends. This is especially important in cases of an unamicable landlord-tenant relationship.
Selling the property while the tenant is on a fixed-term lease requires a bit more finesse.
Unless the lease contains a special early termination clause, tenants in good standing are allowed to live on the property until the lease ends, even if you want to sell the home. For tenants that have violated any lease terms or missed any monthly rent payments you have the option to terminate the lease altogether, but you do risk lawsuits from disgruntled former tenants if the termination is not just.
If you want to sell before a lease is up, trying to list the property becomes another issue. Unless your lease agreement firmly states it, you may not be allowed to show the property to potential buyers. This is detrimental to finalizing a sale with most buyers, even those who are investors, and can hinder the price when negotiating with others.
You can start showing the home if the tenant allows and is given proper notice (typically 24 hours). Otherwise, you’ll have to wait for the lease to end. When dealing with problem tenants, this scenario can be an absolute nightmare.
Selling a rental with tenants to a We Buy Houses company
Many times you can sell a tenant-occupied property to a we buy houses company who are equipped to handle the tenants. These companies happily seek out properties with problem tenants and expedite closings with cash offers. This allows you to sell the house without dealing with the tenants or the issues of selling on the market to a traditional buyer.
You don’t have to worry about showing your home (and the scheduling nightmare that goes along with it), making repairs, or problem tenants driving away the potential buyers or honoring the tenant’s current lease and reselling in the future, all while you have to hold on to a problem property that you don’t want. If you want to or need to sell your house immediately, but your property is occupied by tenants on a lease or problem tenants then contacting a local house buying investor may be your best option.
Want to Sell Your Rental With Tenants & All?
We want to talk to you. Sesa Properties is a local, trusted cash house buying investor operating in greater Cleveland, OH. The large majority of properties we buy are rentals with tenants. It is one of our specialties. As a company we are dedicated to making the selling process as expedient and painless as possible for those who need to sell a house in Cleveland. We buy houses for cash, as-is and aim to make the entire process as fast and easy as possible. If you are ready to find out what we can offer for your house click here to get your confidential, obligation free offer started.
The information presented in this article is for educational purposes only and should not be considered legal, financial, or as any other type of advice.
You May Also Like