Do you plan on selling a property with tenants?
You may be wondering how you can sell a house or an apartment with occupants. This dilemma came to us recently from a client. If you are in the same situation, you may be wondering if there is a better way to approach this without creating a rift between you and your tenants.
A tenant can make or break a sale. You need to be communicative with your tenant in advance to ensure a hassle-free and faster deal because not all tenants are created equal! Some will willingly move out but others will protest and insist on staying until their tenancy contract ends.
Here’s how we think you should tackle this if we will put ourselves in your shoes.
Option #1 Wait for the contract to expire
Tenants can be a wild card in the real estate business. Most real estate agents suggest letting the lease to expire first.
This applies if you have a difficult tenant or one who is unhappy about the property being sold out under them. As much as you would want to make necessary improvements of the property right away, you have to tackle this legally and respect your tenant’s rights. It is your duty as a landlord to do your part and fulfil your side of the bargain when your tenant signed the lease agreement.
Besides, it is not advisable to show the prospective buyer to a property that looks less appealing with a disgruntled tenant or a messy place.
Option #2 Sell while tenant is still occupying the place
Now, if you have a cooperative tenant, there’s a higher chance that selling would be almost painless. Most tenants, once notified about a future sell, would immediately look for a new place to move into. Probably because most of us would rather find a new place as soon as we can instead of dealing with stress that showing a property can bring.
If your home is located in a nice neighbourhood and you think you can sell fast, see if you can use your tenants to your advantage. Some buyers are specifically looking for suited properties as it can be a great mortgage helper. If your tenants wish to stay until the property is sold, consider offering them a lower monthly rent (if they can help you sell the place faster, by ensuring the property shows well) OR help pay for the moving costs.
Be a considerate landlord and make sure to notify your tenants ahead of time about the impending sale. Nobody wants a short notice! If by chance you have difficult tenants, let the lease run out, or find a legal way to get the place back and sell it vacant. But if you have a good relationship with your tenants, try to work with them.
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