So, you want to sell your rental property? But, wait! You have tenants living in your property. What are your options in this process?
- Sell the home as a rental investment property and transfer the current lease to the new buyers
- Ask the tenants to move out and then sell the property
- Evict tenants that have not held up their agreement on the lease and then sell
So, which option is best for you? This depends on your lease or rental agreement.
Sell the property and transfer the lease
Have your tenants upheld their side of the lease agreement? If so, you do not have grounds on which to legally evict them from your property. If your tenants are upholding their end of the bargain, they have rights. In this case, the simplest route is usually to sell the property and pass the lease off to the new buyer.
The problem with this option: you limit the pool of people interested in buying your property. Home buyers are usually looking for a place to live and not a place that’s already lived in by tenants. Depending on the location of your property, if it’s situated in a multi-family rental type neighborhood, then it would still be a good idea to sell the property as a rental opportunity with good tenants. If your property, however, is in a neighborhood with mostly non-rental single family homes, then owner occupant home buyers are more likely to be the buyers interested in your home. What can you do?
Ask the tenants to move out
At this point, you can only ask the tenant to move out voluntarily. You can not evict them or force them to move out. You can notify the tenant that you plan to sell the home and give them the option to move out and terminate their lease without any repercussions. If they do not wish to move out, you cannot force them.
Another option is to offer them “cash for keys” or moving assistance in exchange for moving out of the property. In order to motivate the tenants to move out, you can offer them an amount of money in exchange for their agreement to move out of the property. If this is an option for you, consider what it would cost for them to move out and find a new place. A reasonable amount, based on what you can afford, would likely be $500-$1500. This would allow them to pay their first months rent at a new place and potentially cover other moving expenses. If they are not interested in moving out, you cannot force them to do so.
Does your tenant have a month-to-month lease? In this case, you as the landlord can legally ask them to move without a reason. You must simply give notice to your tenant 20 days before the end of the rental period.
Evict tenants who have broken their lease
If your tenants are not paying their lease or upholding other responsibilities in the lease terms, there are steps you can take to evict the tenants. You cannot force them out on your own; you must get legal authorities (the Sheriff’s dept). If you are facing a situation like this, we recommend taking a look at tenants rights and landlord laws before you begin the process.