The tenant you’ve had for the last two years has been great and very easy to work with, but they won’t be renewing their lease. Will you try to find another good tenant to rent your property, or will you take advantage of the market and decide to sell? For a recent client of ours, this was his exact dilemma. He and his wife had moved to Chicago for a new job opportunity and have been renting out their San Diego property for the last six years. Initially, they thought Chicago would be for a year or two, but now it’s looking like they won’t be coming back to sunny San Diego anytime soon. While they had gotten lucky with some pretty good tenants, it had still been a hassle finding new tenants and managing the property from afar. They were so far removed from San Diego in their day-to-day lives, being landlords was no longer enjoyable and they dreaded having to find more good tenants. They were tired landlords. They decided to sell the house while the tenants were living out their last few months of the lease! Selling a home from out-of-state is usually not an easy task, but that doesn’t mean that it can’t be. Here are some tips in making the process go smoother, and faster.
Do’s and Don’ts in Selling a House with Tenants
First, is your tenant on a month-by-month or fixed-term lease? Depending on which lease option they are contracted under, your flexibility changes. If your tenants are locked into a month-by-month lease, for example, you are required to give them the advanced notice of 30-60 days (depending on the state you live in). Send your tenant a written letter stating when their residency must end- politely ask your tenants to have all of their belongings moved out by that specific date (be very clear and concise). As far as showing the property while the tenant is in place, this largely depends on what is outlined in your agreement. But, rule of thumb, be respectful and give your tenant at least 24-hour advanced notice of any showings.
The other lease option is that of a fixed-term. For example, if your tenant is on a one-year lease, they are entitled to occupy the property through the completion of that year contract. The only ways around this: if the tenant doesn’t pay rent or violated any other lease terms that allow you to terminate the lease OR your contract had a specific early termination clause included.
This process of selling with tenants in place greatly varies and depends on the nature of the relationship between tenant and landlord. Despite legal requirements, if you have a good relationship with the tenant, you may be able to sell the house with the tenant in place as long as you agree to give them a certain amount of time to find a new place and move (regardless of when their lease is actually up). Other tenants may be difficulty and not want to comply with being in your property while it is being shown to prospective buyers. In this case, your best bet is to wait until the lease is up and you can sell the property once tenants are gone.
Ways to Keep Your Tenant Happy During the Transition:
- Be upfront: first and foremost, be honest with your tenants if they are open to having a discussion with you. Explain the fact that you are selling, and set an agreement that explains the selling process and how long you’ll give them to find another place before they need to move. This will make them feel like they’re not going to get booted without a place to live!
- Incentives: While this may feel unnecessary, you should consider what incentives may keep your tenants happy while you have the property listed for sale. If the scheduling of open houses and inspections are a burden, consider adding to their security deposit every time they allow a showing. Or, maybe you can guarantee an extra $200 to their security deposit return if they keep the house in clean condition upon moving. Whatever you can do to ensure their cooperation, the easier the process will be.
- Ask questions: If you’re an out of state owner, you may just need to ask your tenant what would make this process run smoothest and work in their favor. If you give them this opportunity to present their fears or concerns, they will be much more willing to help you in return. In the end, the last thing you want is an angry tenant in your property.
How Selling Fast IS Possible for Out of State Landlords:
The answer: sell direct to a reputable home cash buyer like Sell Your House Direct. Let me explain some of the benefits:
- You won’t be inconveniencing your tenant with buyer showings and staging. Because we are the buyer, you and your tenant won’t have to worry about scheduling and coordinating multiple buyer showings (as an out of state owner, this can save you from a ton of extra hassle). Plus, your tenant will likely be more willing to comply as this process doesn’t demand anything of them.
- You don’t need to worry about having the home repaired or cleaned. In many absentee owner scenarios, you really don’t know the state of your property. Many times, the condition isn’t exactly what you had thought. Whether you had bad tenants, or just tenants for a long time and haven’t made many repairs, your home could be far from “list-ready.” By selling direct, you don’t have to worry what condition the property is in, and instead let us deal with all of the cleaning and repairs.
- A home investor like us can schedule the closing to meet yours (and your tenant’s terms). This means that, instead of catering to a prospective buyer’s needs when it comes to closing, we adhere to your terms. So, if you want to give your tenant three months to find a new place and move, we will schedule the close date accordingly. We have the ability to guarantee a closing date of YOUR CHOICE.