Guide to Selling a House with Tenants


There are several reasons why you might be ready to sell an investment property. Whether you’re attempting to sell a house or a rental property, sometimes investors need to move on to the next venture. Maybe to take advantage of the appreciation value, or maybe for more time to focus on other investment opportunities. Whatever the reason is, there are a few things you should know about before trying to sell a tenant-occupied home. There are many reasons why a homeowner might need to sell a property prior to the tenants vacating. From appreciation factors to issues with tenants, sometimes the sale needs to happen sooner rather than later. 

Let’s explore some of the challenges of selling a house or rental property with tenants. A Team Marketing has tips for selling a house with tenants and how we can guide owners through the process.


Can I Sell a House with Tenants?

For homeowners or rental property investors, there might come a time where they have to ask, “Is selling a house with tenants a possibility?” The answer is not a simple one: It depends on the situation. There are numerous parties involved with selling a house with tenants, so many investors will try to avoid it. From the interested buying party to the tenants occupying the home or rental property.

There are a few hurdles and challenges of selling space with tenants, but that doesn’t mean it’s impossible. There are many strategies for selling a house with tenants still occupying the property. These strategies can provide investors with options for moving forward with other options. Selling a house with tenants is more simple than one might think. As long as there is clear communication, unanimous understanding, and a solid selling process, it can be done.  

What Does Tenant Occupied Mean?

When it comes to selling a house or rental property with tenants still living there, it can be a complicated legal matter. “Tenant-occupied” means that an existing lease is still in effect and attached to the property rather than the owner. Those tenants occupying the property have the right to stay until there is intervention by the owner attempting to sell.

Challenges of Selling a House with Tenants

Selling a tenant-occupied home will look a little different than listing a traditional property. It does not mean it can’t be done, though. No one should be selling a house with tenants inhabiting without knowing the challenges they may face. Here are a few of the most common challenges to consider before attempting to sell a tenant-occupied home: 

Smaller Buying Pool

One of the bigger obstacles investors face when selling a house with tenants is appealing to a smaller pool of buyers. Many buyers are not willing to take on tenants, and instead, want a property they can move into right away. A tenant-occupied home can discourage many traditional buyers. This is because they are likely selling a previous home or moving out of a rental on a set timeline. Tenants will impact the listing and selling process. Consider that this may cause the property to sit on the market for longer than expected. There’s a smaller number of buyers in the market willing to purchase a property with tenants in place. 

Marketing and Tours are More Difficult

It can be harder to schedule the necessary showings, inspections, appraisals, and more with tenants living in the property. You will need to provide them with advance notice, and it can be challenging to coordinate with multiple people. Further, you want to avoid frustrating your tenants with constant requests to get inside the home. Buyers may become less interested in the property in favor of homes with more flexible showings. This can further decrease your pool of buyers. COVID restrictions also make it difficult to have open houses, as there may be limits and restrictions on the number of people allowed in the home at one time. 

Property Condition is Out of Control

Clean, tidy, and staged homes generally tend to sell faster and for higher amounts than those that are not. Selling a house with tenants can challenge this industry norm because the property’s condition will be largely out of your control during the selling process. You will not be able to stage the property or have it vacant for listing photos and showings. The cleanliness of the home will depend on the cleanliness and tidiness of the tenant. 

Sellers will also have less opportunity to modify or upgrade anything before potential showings or even the home inspection. Failure to perform required inspections may jeopardize your ability to sell without understanding the state of the property. Not only does this have an impact on the home’s capacity to increase value, but depending on the results of the home inspection, purchasers may find themselves in a stronger position to negotiate the final sale price lower.

Tips for Selling a House or Rental Property with Tenants

While there are obstacles involved, it’s not impossible to sell a house or rental property with tenants still there. In fact, the challenges above should not discourage you from selling your tenant-occupied home. There are several creative solutions that can be used to get the most out of your investment property: 

  • Wait until the home is vacant to sell
  • Incentivize tenants with cash for keys
  • Sell to a Cash buyer  

Wait Until Property is Vacant

Depending on how quickly you need to sell, you can wait until the property is vacant to sell it. This can help attract more buyers and give you control over the condition of the property. However, there are certain regulations to consider when waiting for a vacancy. You will likely need to issue a 30 or 60-day notice to the tenants. This depends on how long they have been in the home. In simplest terms, if you’re attempting to sell a home with tenants and they are already due to leave soon, waiting might be easiest. 

This throws into doubt a slew of notices and critical documentation that, if not done correctly, might render the eviction process null and void. It’s also worth considering the additional tenant safeguards imposed as a result of COVID-19 in various states. The eviction moratorium is expected to last until the end of 2022, as of this writing (January 2022). It may be easier to enlist the services of a property manager to help you negotiate those conversations, especially if you’re selling a rental property with tenants.

Provide Tenants Incentives to Vacate

Another option in selling a house with tenants is through a cash-for-keys agreement, which essentially means paying tenants a sum of money to move out of the property within a certain number of days. This can result in a win-win situation in which the owner takes control of the home before the lease expires. The renter then receives cash to help them transition to their future residence. These legally enforceable private contracts are an excellent approach to encourage renters to vacate before the lease expires (and to avoid the legal hurdles of an eviction).

This can allow you to sell the property sooner, but it does come at a cost. If you’re wondering: “How much should I give a tenant for cash for keys?” There is no correct answer or industry standard. While there is not a set amount you have to offer, there are regulations surrounding cash for keys renters’ rights. Consider how long the tenants have lived in the property, how early they’re leaving, and how much you can offer without undermining your return on investment.

Sell to a Cash Buyer

There are buyers that are willing to take over tenant-occupied properties. They either keep the occupants or pay and facilitate a cash-for-keys transaction directly with the tenants. With a cash-for-keys agreement, this is a terrific method to sell the property quickly and without losing money. This may be the most convenient option for investors because they will not have to wait for the property to become vacant. Cash buyers, such as A Team Marketing, will be able to complete the transaction quickly.

Cash buyers typically accept as-is properties, allowing for minimal inspections and viewing. A Team Marketing will request two appointments at the home. While other buyers may need more time at the property, this is still a quick timeline compared to traditional transactions. Fewer property walkthroughs and inspections mean less coordinating with and disturbing the current tenants in place. This creates a relatively seamless experience for tenants, as the buyers assume the same terms of the lease. Security deposit money would transfer at the time of the sale, and you as the seller can move on after a clean, successful, easy transaction when selling a house with tenants. 

Tips for Selling a Rental Property with Tenants

We’ve mostly explored how selling a property with tenants works in the context of a home or house. Selling a rental property provides an additional layer of legal considerations. This is because a mortgage works differently than an apartment or rental lease. In actuality, the process of selling a tenant-occupied rental property works very similarly to selling a house with tenants. 

When selling a rental property it’s often easier to manipulate the numbers in the landlord’s favor. He can offer a lower rent for their remaining months as an incentive to vacate earlier. Since the landlord has more direct control over the investment property, their options are slightly expanded. Lower rent can also be offered as an incentive for allowing more tours and to encourage the tenants to keep their property clean and tidy for showings. 

Selling a House with Tenants is Simple with A Team Marketing! 

It is entirely possible to sell a home with tenants in place — though it can present some challenges. Property owners will need to coordinate with tenants to successfully market the property to a smaller pool of buyers. Luckily, there are a few alternatives that can provide investors with a quick sale and simple closing. Consider how a cash buyer could help you sell your tenant-occupied home. This is so you can start on your next investment opportunity. If you’re interested in selling your rental property with tenants, fill out our contact form or call us at 855-662-8326.

Published by Jeff Anderson

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