Selling a House With Tenants

how to sell a home with renters in it

A tenant can make or break your property sale. You must plan well in advance and communicate openly with your tenant. In some cases, you might need to postpone the sale. Here’s what you need to know about selling a house with tenants.

Pros and cons of waiting for the lease to expire

Most real estate agents would advise sellers to wait for the lease to expire, because tenants can be a ‘wild card’ in the high-stakes real estate game. The thinking is that it’s safer to wait until the lease is up and the tenant leaves. After that, make any necessary cosmetic fixes and repair work and sell the property vacant.

This is particularly important when you have a tenant who is unhappy their home is ‘being sold out from under them.’ When that happens, the last thing you want is for them to make showing the home difficult. For instance, a resentful tenant may not keep the home in its best condition, which can have a negative effect on your bottom line.

But selling a vacant rental unit can be financially challenging, too. It can take months to sell a home, during which the seller receives no rental income.

Pros and cons of selling a tenant-occupied home

A furnished, lived-in home often shows better than a vacant one. It gives buyers a stronger feeling for what it’s like to live there. For that reason, it can be beneficial to keep your tenants in your property during the marketing and sales process—as long as you have a good relationship with them.

You can help ensure that relationship is strong. Lower the tenants’ rent for a month or two leading up to the showing and/or selling. If you can get them to stay and cooperate through open houses and showings, guarantee them enough time to find another place and move. You might also consider offering to pay their moving costs, especially if they help you get the home sold quickly.

Bottom line: The success of dealing with a tenant during a sale is less about the message itself. It’s about how the message is delivered.

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