Homeowner · Chillicothe, OH · Member since 2013 · 18 posts · 1 vote
Are there any rules, or laws regarding the sale of renter-occupied single family units? I'm specifically looking at renter rights. Is there a certain amount of time (after putting renters in a unit) that I would have to wait before legally being able to sell the unit? Any input is greatly appreciated. Thanks in advance.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
13y
Why? If you're going to do fix and flips, whether for the retail market (owner occupants) or investors (rentals), fix it and sell it ASAP.
OTOH, if you want to hold rentals, plan on holding them forever.
If you rent it for three years, you will just have to redo some of your rehab in order to sell it, especially to a owner occupant. And, there's a very real chance the tenants will trash the place, causing you to spend a significant amount to fix it (again.) IMHO, this hold as a rental then sell in a few year makes little sense. Either fix and flip and get in and out ASAP or plan to hold for the long term.
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
13y
Daniel Demint be sure if you sale any leased property that you include a copy of your lease and that your sale contract include that the sale is subject to the existing lease. Include a hold harmless clause from buyer in the event tenant sues for violation of the lease by new buyer. Jon Holdman I assume that he wants to hold for 2 to 3 years because of short term vs long term capital gain taxes, or to be able to qualify for a 1031 transfer to avoid taxes if he reinvests into more real estate immediately. I do agree that selling while the property is nice and new smelling makes them much easier to sale, and usually at a much better price.
Investor · Cincinnati, OH · Member since 2010 · 1k+ posts · 928 votes
13y
Daniel -- if you're trying to "season" the performance of the SFR rental, like you might with an apartment building, don't worry about it, not the same thing. You might want to state that you'll hold it for a year to avoid ST capital gains tax rates, and that you will then sell when the market has recovered to some designated point (when rent-vs-buy ratio has gotten to x, value has gotten to x% of replacement costs, etc.).
Homeowner · Chillicothe, OH · Member since 2013 · 18 posts · 1 vote
13y
Thank You Jon, Jerry, and David for your responses. This "hold" would be for tax purposes as Jerry, and David mentioned. The plan after selling this particular house, is exactly as you mention, Jon. This first property is just to get me started. Thanks again, guys.