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Are you sick of your nightmare tenants? No body blames you. That’s why we buy houses with tenants in them – to help you out of being a landlord.
Landlording is a rough business. Between keeping up with property maintenance and collecting monthly rent, a lot of time and resources are used to ensure a smooth renting process.
But paying costly property management firms or dealing with long term nightmare tenants takes its toll on even the most veteran landlords. If the stress forces you to exit the landlord business or you juggle too many investment properties already, you may want to sell. Instead of waiting months (or years) for the tenant’s lease to expire, consider selling to a professional investor willing to take on even the most strenuous tenants. Don’t worry; we buy houses with tenants.
“Can I sell my rental property with tenants in it?”
As the property owner, you may believe it’s simple to sell a home without tenant interference. But sometimes selling a rental property with tenants on a lease can be a complicated mess. Although you own the property, the tenants have rights too.
There are certain state restrictions that create unnecessary roadblocks for the homeowner. If a landlord wants to sell before the lease is up, they can find themselves facing severe legal penalties with enormous monetary consequences.
Selling a tenant-occupied property is different than selling a family home or inherited property. As long as the tenant continues to pay rent, they have a right to live on the premises. While some tenants are worthwhile and make timely payments, others can be problematic, forcing a landlord to sell the property outright. When a landlord decides to sell, dream tenants can become nightmares for fear of displacement. It’s crucial to know your options as a landlord and where a renter’s rights end.
When selling a rental property with tenants on lease, it’s important to know the state laws. Some states require a landlord to give a 30 or 60 day’s notice, while others have laxer guidelines on the notice for a tenant to vacate. To uphold the laws of Iowa, landlords must send their tenant a letter that clearly states when their tenancy ends. This is especially important in cases of an unamicable landlord-tenant relationship.
Selling the property while the tenant is on a fixed-term lease requires a bit more finesse. Unless the lease contains a special early termination clause, tenants in good standing are allowed to live on the property until the lease ends, even if you want to sell the home. For tenants that have violated any lease terms or missed any monthly rent payments, landlords have the option to terminate the lease altogether, but risk lawsuits from disgruntled former tenants.
If a landlord wants to sell before lease is up, trying to list the property becomes another issue. Unless the lease agreement firmly states it, the homeowner may not be allowed to show the property to potential buyers. This is detrimental to finalizing a sale with most buyers and can hinder the price when negotiating with others. You can start showing the home if the tenant allows and is given proper notice (typically 24 hours). Otherwise, you’ll have to wait for the lease to end. When dealing with problem tenants, this scenario can be unsettling.
“Can I sell my rental property with tenants in it to the tenants themselves?”
The answer is yes, but only if the tenant wants to buy the home outright. While this would be a great solution to rid yourself of the property, selling to the tenant requires maximum effort. Not only is the landlord tasked with drawing up the paperwork and presenting it to the tenant, they also often assist the tenant in finding adequate funds to purchase the home.
Some tenants cannot afford the property and must consider obtaining a mortgage or other financing options. Securing a proper loan can take months and landlords looking to sell quickly won’t be willing to wait for the possible loan rejection. Selling directly to the tenants requires homeowners to become both landlord and seller, a confusing combination for first-time investment sellers.
Some tenants may want to purchase the property and have the necessary funds. Instead of making the deal a simpler process, they decide to capitalize on the landlord’s desperation to sell. They may want unnecessary or extreme incentives, like a lower rent payment until the sale is finalized or all closing costs. For a landlord that wants to sell before lease is up, this is an unfortunate probability when dealing with tenants.
That’s why you’ll probably be finding yourself looking for other buyers. You could put the house on the market, or sell it to cash buyers like it. That’s why we buy houses with tenants in them – we know how difficult it is for you to find a ready and willing buyer.
Problem tenants can easily hinder a sale for many landlords. They may pay their rent on time, but they completely disrespect your property. They leave the home a mess, refuse to let you show the home, and can even change the locks on you. If you’re seriously considering selling your tenant-occupied property, knowing how to manage these major annoyances is vital.
While some tenants are terrific, others make you regret ever becoming a landlord. If your tenant is unwilling to let you show the property, you may enter anyways if you’re allowed access on the lease. But this can lead to unwanted hostilities, and angry tenants are more likely to drive away potential buyers.
If a tenant changes the locks, landlords risk angering the tenant further by calling the police and forcing property access. Another possible solution includes hiring a locksmith to change the locks at the tenant’s expense. Though none of these are ideal situations, when deciding to sell a property with tenants still on lease, these are likely scenarios that must be dealt with before selling.
There is another solution to dealing with problem tenants when selling the property. Landlords can pay their renters to vacate. Generally, landlords wishing to go this route must offer to pay the rest of the tenant’s rent plus other costly concessions to convince a renter to break lease.
Sometimes this means paying moving costs, giving up the deposit, and throwing in extra cash for the security deposit on a new place. While this option allows the homeowner to list their property without unruly tenants to hinder the sale, it forces them to spend money and time convincing their renters to leave. It’s not the best selling solution.
That’s why selling to cash buyers is a better solution. The reason why we buy houses with tenants is to provide a better alternative for landlords like yourself.
The best selling solution for landlords with tenant-occupied property is selling to an experienced investor. Investors happily seek out properties with tenants and expedite closings with fair market cash offers. That’s why we buy houses with tenants!
You don’t have to worry about showing your home without making repairs or problem tenants driving away the investor; they honor the tenant’s current lease and care for the home to resell later. If you want to sell your house immediately, but your property is occupied by a long term lease, contacting a local house buying investor is your best option.
Don’t stress over selling a rental property; we buy houses with tenants no matter what condition it’s in! We’re always ready to answer any questions you have. Just give us a call at (319) 382-6398!