You might have been happy having a rental property at one point, but with listing prices going up 7 percent a year and a string of bad tenants, you’re now ready to sell.
Selling your rental property comes with its own set of hurdles; like what in the world do you do with your current renters?
Well, if your tenants are on a month to month lease then congratulations, you’re one of the lucky ones. All you have to do is give them a 30-day notice and at the end of those 30 days, you are good to go. Of course, check your lease and state laws to confirm this is what is required in your state.
If they have a longer lease, they have the legal right to live on the property throughout the remainder of it. However, there are some things that you can do to still sell the property.
Here are some of the secrets to getting around your current tenants.
1. Simply Sell to Your Tenant
One of the easiest ways to get around your tenants is to turn them into the new owners. Tell them that you are thinking of selling, and see if they are interested in buying.
A lot of times, especially if they have been living in the house for some time, they are going to love the idea of owning their home.
The risk you run here is even if they are interested, they might not be able to obtain financing. This is where something like seller financing could be helpful. You would basically become their lender and they would continue to make payments to you. This is ideal if you don’t need all the money upfront and are able to collect a portion each month.
Some of you are probably wondering what the point is here, but in doing it this way you are released of all of the owner’s responsibilities, such as costly HVAC repairs and making sure everything is move-in ready for future tenants.
This won’t be the best option for all sellers or tenants but fear not, there are more secrets to come.
2. Remember to Show Tenants Compassion
If your tenants aren’t interesting or can’t buy, then it’s important to still show them compassion through this process. It’s your property, but they are now on notice that they’re going to have to find a new place to live.
The nicer you are to them the smoother the whole thing is going to be. As you or your realtor starts to show the house you’ll need to schedule the viewing with them.
Since they are living in the home you have to give them the proper notice before entry.
If you’ve been a landlord for a while you might know other people who are renting properties. It’s always nice to give your tenants some referrals and to be a reference for them. If they feel like you care about them and their well-being, the odds are they won’t make the process hard for you.
3. Cash for Keys
Sometimes, tenants will be difficult no matter how nice you try to be. Offering them cash to move sooner than the end of their lease could benefit both parties.
This is one of the most popular and efficient ways to sell a rental property. You can usually sell it faster with no one living in it and you don’t have to wait until the lease is up to finalize anything.
Offering cash for them to move out could be your magic bullet to selling. But like with any magic bullet, there’s always a flip side. They don’t have to take the money and some tenants won’t.
If you aren’t able to give then a large sum of money to move then you could also offer to pay for all of their moving expenses. Sometimes that can be enough to get a tenant to leave their lease early.
4. Document Everything
Regardless of if your tenants are being easy-going or not, you need to have everything documented. Keep track of all communications about viewings or timelines regarding moving out.
If you talk to them over the phone always send a follow-up email summarizing what was said. That way you have proof that you notified them of all important actions.
The gets even more important if they have agreed to your cash for keys or moving fees offer. One of the biggest mistakes that landlords make is to bank on verbal agreements. If there is nothing in writing, then an agreement is worth nothing.
Documenting everything helps cover both you and your tenants. There is no reason to feel awkward or uncomfortable about having them sign documents starting what they have agreed to.
5. Sell to Another Landlord or Investor
Other than selling to the tenants, selling to another landlord or investor is the next easiest option. If you sell the rental property to a landlord or an investor that deals with rental properties, then you can usually sell right away. No need to wait for the tenants’ lease to end.
This means you won’t have to go through the hassle of scheduling viewings around the tenants, dealing with cash for keys or financing the sale yourself.
Selling your Rental Property
Some landlords get to a point where they are just done with managing a rental property. Having tenants with a longer than a month to month lease agreement can sometimes put a damper on that.
There are some things you can do that will make selling your rental property a pain-free process. If you take the tips that were outlined above, you should have no problem freeing yourself from your landlord duties quickly.
If you want more information about selling to a landlord or investor, contact us. We buy properties with renters in them all the time, so we are accustomed to the nuances of selling with a tenant. We’ll be more than happy to answer all your questions.