Are you selling a tenant occupied home? It’s a difficult situation to sell a home while someone is living there. It is hard enough when the owner lives there and will benefit financially. But when the property is occupied by a renter, you may be asking them to comply with some issue with no benefit, which often results in no motivation.
Perhaps the tenant wants to move and is looking to purchase their first new home. Your ability to sell a tenant occupied home largely relies on the motivation of the tenant to cooperate with you. Of course, you will need the occupant to keep the property in top condition. Then, there is the situation of showing the home to potential buyers. Keep in mind, if the rent is paid, the renter has rights to the property. These vary from state to state, so if you’re not familiar with what rights belong to the renter, get up to date on these laws before selling a tenant occupied home.
The Tenants’ Point of View
Look at the situation from the tenant’s point of view for a moment. NOw imagine that you’re in their position; you don’t own the home, and though you rent, it has come to be your home. Now, not only must you be ready to leave your home on a 24-hour notice, but you’re expected to keep everything spotless. At the same time, you’re losing your home with no financial recompense, and you have to find a new place to live. A compassionate property manager will consider this perspective and try to ease at least one of the tenants’ concerns.
Wait Until the Lease Expires
Most sources agree it is best that the tenant’s lease is up shortly before you attempt selling a tenant occupied home. If there is no violation of rental terms, you may need to wait until the lease is up to proceed with selling the property. If you’re in a rush for some reason to sell, you might consider ending the lease if there is an early termination clause in the contract. If the tenant has always paid rent on time and kept the property well maintained, perhaps you can move them to another property you manage. Throw in something to sweeten the pot and add some motivation for them to allow showings while still living there.
What Will Motivate the Tenant?
Perhaps the motivation could be a bigger home, with a bedroom for each child or one with amenities not at the current property, such as a dishwasher or washer/dryer hookup; even a bigger yard. The thought of moving to a bigger, better place or even a small upgrade can motivate the tenant to keep the place spotless and vacate for showings with 24 hours notice. A small reduction in rent for the place you can offer them sometimes creates motivation, therefore increasing cooperation.
Sell it to the Tenant
Selling a tenant occupied home when the tenant does not want to move requires innovation. Offer to sell the property to the tenant. If they might qualify for a loan, walk them through the process. Refer them to one of those friendly loan officers that’s helped you before. Or seller finance for them. If they’ve always paid rent on time and love the property, you might find this the best solution.Consider how long they’ve lived there and how long they are planning to stay.
Sell to an Investor
Sell to an investor. This is the one type of sale where having a renter already in place is a plus. Particularly if it is a good renter. If you hope to move quickly on selling a tenant occupied home, consider this alternative. This limits your market of potential buyers and may not get you the best price, but if the home must be sold quickly, it is an option.
Turn to the Professionals
In a situation like this, it is especially helpful to rely on a professional property management team, experienced in handling a situation such as this. Already familiar with laws and other relevant details, the management team can position the situation where it is best accomplished to everyone’s satisfaction. Their experience and expertise have a chance to shine, and you might get to see them display one of their valuable skills.
It is possible to sell a home while a tenant is living there. Those who’ve always paid rent on time and who’ve acted responsibly with the upkeep is just the occupying tenant you want in your corner. You may have to gently solicit their desires, or even insert them from your list of possibilities. Honesty always shows through. Much of your success in selling is the motivated tenant. You’re the one whose job it is to add the motivation.