Selling Your Property While It’s Tenanted
Every property owner wants the selling process to be as seamless and pain-free as possible, but things can get challenging if the property is an investment property and there are tenants occupying it. You have to rely on other people to make sure the property is clean and presentable at all times, and this can be frustrating if their levels of hygiene are not up to your standards.
But remember, the process will be much easier and much less stressful if you work with the tenant and continue to communicate regularly.
There are pros and cons to selling a property with tenants, as opposed to selling it while vacant.
The sale process can be quite stressful for your tenants. Not only are they facing the possibility of not being able to live in the property once sold, but the burden is also on them to ensure the property is up to scratch for inspections.
The first step you need to take when you decide to sell your property is to inform the tenants as soon as possible. If you are open and honest with them, you are more likely to get cooperation in return. Plus it gives them time to find an alternative place to live, in case an investor does not buy the property.
It is common to offer the tenant some form of compensation for their troubles.
Sometimes this means a reduction in rent for the sale period, other times it means a week or two rent-free. Whatever your decision, this shows that you care about them and that you understand they will need to do a bit more work to ensure the property can be inspected on a weekly basis.
It is possible that your tenant may choose to find another place to live as soon as you inform them of you decision to sell. If this is the case, document the process to show that both parties have agreed and signed for the finalisation of the lease. This means there is no room for confusion and, if anything gets disputed, you have the supporting documents.
Depending on the state the property is in, the tenant will have different rights concerning breaking the lease. These rules differ according to which state you live in, so it’s important you research your rights and obligations during this time.
Your property manager or real estate agent will be able to help you with any legal questions you may have during the process.
When it comes to open houses, you always need to remember that someone is living in the property. You need to be sensitive to and considerate of the tenant and their belongings.
The best thing you can do is to keep the lines of communication open. Together with your agent, try to find an inspection time that suits all parties. And remember to be clear with your tenants that despite allocated inspection times, people may want to come through privately.
It’s reasonable to expect that your property should be well maintained throughout the selling process. And remember to encourage tenants to be open with you, whether directly or through your property manager, regarding any concerns they have.
Or alternatively, contact us and see how we can help you through the selling process.