Selling and Showing a House with Tenants? How to Prepare and Ways to Sell with Less Hassle
If you’re a landlord and you’re thinking about selling your rental property, begin planning and coordinating communication with your tenants sooner than later. The last thing you need while trying to sell a house is to deal with unhappy tenants who are going to try to make your life more difficult. We always tell our landlord clients to begin the process on the RIGHT foot by giving their tenants the required 60 days’ advanced written notice that their tenancy will be coming to an end. If the tenant hasn’t lived in your property for very long (less than a year), then you’re only obligated to provide a 30-day notice. But, be mindful that the more you communicate and help your tenants, the more likely they’ll be willing to help you in return.
Selling Your Rental Property with Tenants: Your Options
Wait until the tenant vacates when the lease expires:
- It’s easier and you can take your home.
- It will show better (cleaner and repairs necessary made).
- No notifications are needed for showings or open houses.
The negative: You’ll lose money on at least a month’s worth rent. Considering the fact that home sales typically take longer than a month, you can expect to be without payment for more like a few months. You will also be responsible for covering utility expenses during this time.
Sell and show the house with tenants in place:
- You’re less likely to miss out on cash flow.
- No vacancy, so there is less transferring of utilities and the new buyers can move in once the tenants leave.
- The home still looks like a home with furniture etc.
The negatives: You can’t ensure a clean unit. You may also encounter problems with odors from animals (cats or dogs etc. living in the house). If the tenant is angry, they may try to sabotage the sale of the home by making showings uncomfortable. Your tenant could also prolong moving out, thus making it difficult for the new buyer to move in.
Some Advice in Showing a Home with Tenants
Communication is key. Try to put yourself in your tenant’s shoes, and understand that while this is your property and you have every right to sell, it will put some stress and burdens on your current tenants. Not only will they have to coordinate their schedules around individual property showings and longer open houses, but they are also asked to keep the property well kept and clean during the sales process. This can provide quite a lot of extra work and hassle for someone. Here are some ways that you can show understanding and make the process easier:
- Ask them what times work best for them. There could be times that your tenants are consistently all out of the house (for work, extracurricular activities etc.), if you can schedule some of the showings around their schedule- this will make for a much smoother process with less hassle.
- Avoid open houses if at all possible. Open houses require that your tenant and animals (if applicable) be out of the home for extended periods of time. This can be incredible inconvenient for anyone, but especially for families with kids or residents with pets. A 15-minute inspection is much more manageable. Try to limit showings as much as possible, and try including video walk throughs etc. as an alternative.
- Notify in advance. Most states require at least 24 hours in advance notice of entry to the property, but 48 hours is even better. The longer your tenants are prepared to accommodate the showing, the more likely you’ll walk into a clean house/avoid lash back.
- Offer to pay for cleaning services. Let’s be real- you may be a clean freak, but that doesn’t mean that your tenant is. Plus, the standard of cleanliness you hold the property to while trying to sell is much higher than any other time. The better you can get the home looking, the more likely you are to receive offers. Offering to pay cleaning services will help your chances of selling, and make your tenants’ lives easier.
- Show gratitude. As a property owner, it is your right to show your property. But, the more mindful and considerate you are of your tenants and their lives, the more likely they are to respect and aid the process. You may want to even consider dropping your tenant’s rent during the time of sale. Because of all of the potential disruptions they’ll be dealing with, this will soften the blow.
If you consider all of these steps and apply them, hopefully you’ll be able to avoid the eviction process. If worse comes to worst and you have to evict your tenants because they aren’t cooperating, then be sure to follow the legal route to do so. In this case, you would need to file for an unlawful detainer.
Selling a House with Tenants Can Be Easy if You Choose a Direct Buyer
If you’re skeptical of your tenants’ willingness to cooperate in the sale of your rental property, you do have another alternative in selling. If you choose to sell direct to a buyer (rather than listing the home traditionally on the market), you’ll be cutting out everything that makes the process inconvenient for tenants who live in the home. While a cash buyer will still want to inspect the home at some point, there will be no need to schedule countless buyer showings or the need to keep the house clean and tidy. After looking at the property, a direct buyer like us will be able to purchase the property in the simplest manner. You receive cash for the home without having to prepare the home or make any repairs etc. and you’ll also enjoy more flexibility as we can close when it’s convenient for you. For example, if your tenants have requested a few months before vacating, we can work that into your offer and operate off of a schedule that works for you AND your tenants (so everyone is happy).