6 Shares

sell house with tenantsWe often gets calls from landlords looking to sell their investment properties. While it is 100% possible to sell a tenanted property, there are some key differences that you need to understand. Here’s what you need to know:

  1. If your tenant is in a lease, the tenant has a right to stay. It doesn’t matter if the new owner wants to move in, the lease obligations transfer to the new owner until the end of the lease term.
  2. If the tenant is month-to-month, the new owner may move into their space. 60 days written notice (from the first of the month) must be provided and the new owner must occupy the space themselves (or rent it to a family member) – they can’t simply kick the tenant out and rent it to someone else.
  3. If you’re thinking of selling in the near future, don’t sign new leases. You’ll get a higher price for your house if you are targeting both investors and end users who want to live in one of the apartments themselves. Having a vacant apartment is an attractive feature for many Buyers.
  4. If you’re NOT thinking of selling in the near future, increase your rents every year. The amount of rent your tenant pays will directly impact the sale price of your house. Because the lease transfers with the property, a tenant who is paying below market rent will mean the new owner will take in less income than they would with a comparable property, and that will make your house less valuable (read: lower price). Always charge market rent to a new tenant, and always increase rents annually by the amount allowed by law.
  5. Tenanted apartments are harder to sell. The law requires that you give a tenant 24 hours notice before showing their apartment, meaning you miss out on all the last minute showings and potential Buyers.
  6. You have a right to show your home to potential Buyers, provided appropriate notice is given. While it isn’t convenient for a tenant, it is absolutely your right. Don’t let your tenants bully you into restricted showing times, but always be respectful of the tenant. A cooperative tenant will go a long way to making the sale happen faster.
  7. It may be more difficult to market a tenanted property – you might be restricted in the photos you can take, you likely won’t be able to clean or stage the property and the tenants may not be cooperative with open houses. Make sure you’re working with an agent who is used to selling tenanted properties.

If you’re thinking of selling your income property in the future, give us a call to discuss what you can do today to make sure you get top dollar for your house when it comes time to sell.

Comments

  1. Elle McFadden says:

    I have a question from a tenant’s perspective. My landlord is selling the house in which I rent a suite. He’s a good guy, so I’m happy to cooperate when prospective buyers want to see my suite and gave permission to the Real Estate agent to enter my suite with 24 hours notice (each time). I also keep the place spotless and stage it as best I can.

    Here’s the issue. It seems to be a courtesy that I not be there on site when the showings take place. I can’t find anything legal saying I actually have to temporarily vacate the premises. Am I obliged to leave? I’ve left the past 6 or 7 times they’ve had a showing, but sometimes it isn’t always convenient. I often work from home and I have a child.

    What’s the protocol? What if it’s a quick showing – not an open house. I don’t HAVE to leave, do I?

  2. Brendan Powell says:

    You are correct–you are not obliged to leave, although from the agent’s and seller’s perspective it is always preferable! It can be awkward showing a place when someone is home…but it does happen.

    It sounds like you are being more than cooperative, and I know your landlord will really appreciate it–things like being flexible with showings and keeping the place clean can mean literally thousands of real dollars in a sale. Under the circumstances, if there are times that are really inconvenient to leave, I’m sure they will understand!

    Besides, the better it shows and easier
    It is to see, the faster the whole process will be over for everyone

  3. Suppose a landlord has a tenant who pays a below market rate and the lease is on a monthly basis.

    Can a landlords sell their home on the MLS at an above average market price; encourage the tenant to get a new place; show their home while the tenant lives there; and later decide to rent to a new tenant at a higher rent?

    I seen cases where a landlord repeats this cycle every 12 months.

    • Melanie Piche says:

      The only way a new owner can force you to leave is by moving into it themselves. Just because it’s listed for sale, doesn’t mean anything has affected your tenancy.

      • I have a tenant on a fixed term lease However I have to sell my property due to financial issues
        How can I get my tenant to leave

  4. I am a tenant who has given my 60 days notice. Landlord wants to list his home now. He wants to take pics with my furniture and stuff. I’m not okay with that. He refuses to list the property with vacant pics of when I first move in, because he knows it won’t sell.
    He has said he has to stage it then. And we can move my furniture in the garage. No way!!
    I also don’t want him using my furniture, plus bring a stager in to stage my stuff for his benefit
    He doesn’t want to lose money and have a property after I leave.
    This is ridiculous!
    What are my rights?
    I don’t want to pay him the next two months and have to leave now, because of this.

  5. im seling my condo. I provided more than 60 days notice to tenant. The buyer paid deposit and sale agreement signed. The tenant is saying she is not able to leave on closing date but the new owner wants to live in his house on closing date. What do we do ?

    • It seems that you have no rights to do whatever you want with your property even if you own it
      I have the same issue
      I have to sell because I’m going broke and can’t do anything

  6. If my landlord sells his house and my lease does not end until November of this year, will the new owners make me sign a new lease?

    • Melanie Piche says:

      The landlord can’t make you sign a new lease until November (and even then they’d be subject to the usual % increases and you could simply go month-to month).

  7. Greg Young says:

    We have a tenant on a month to month lease and want to sell the property. What if someone else wants to buy it and then rent it out…can they do so without moving into it themselves or moving in a family member?

    • Melanie Piche says:

      The buyer’s options are to keep the existing tenant or move into it themselves/family member. They cannot exit the tenant and rent to someone else.

Leave A Comment

Your email address will not be published. Required fields are marked *