I own a rental property (SFH) that has an excellent tenant in place, her lease ends in September. My husband and I are discussing options to sell. The property is in a suburb of Austin, TX. My understanding is if we did sell before her lease sends, the new owner needs to honor the terms of our lease, is this correct? Has anyone sold a property with a tenant and if so, how was your experience? This house was built in 2018, never had issues, worth somewhere between 280-300K. I'm thinking with how crazy the market is, especially in Austin, someone may be happy to buy the house now and move in when my tenant's lease is over. What's the best approach to take, try to sell now, or wait until her lease is over? Thanks for your thoughts.
@Amanda Jarrett I have sold several properties with tenants in place. One thing to consider is most tenant-occupied properties will attract investors and detract primary home buyers. A good majority of primary home buyers are looking to use a mortgage to purchase the home, and if they can’t move in within 59 days after closing, they will not be able to secure primary home loan terms with their lender. Primary home terms are what give them the best interest rates and down payment options. Investors generally have to pay higher interest rates and larger down payments.
You can sell now if you want a good investor-owner to take over and honor the lease. If you prefer to also attract primary home buyers, I would wait until the tenants fully move out, then prep the home for sale and sell it vacant to attract the largest pool of buyers.
@Amanda Jarrett yes the new buyer needs to honor the lease. The market is crazy right now and you might be able to get what you want from the property selling with a tenant. You are most likely going to get an investor who is unlikely to pay as much as a home owner.
@Ryan Kelly Thank you for responding, I did not realize that a non-investor had to take occupancy within 59 days, but that totally makes sense. I thought with so many people moving to the area, I may find someone from California or New York who would buy now and wait a few months to move.
@Stephen Keighery Thank you for responding. It's definitely a crazy market right now so I don't think it is out of the question to make what we are looking for. It's not a crazy number, I more so just want to offload it. Will be speaking to our agent today and really see what makes sense.
Typically, not always, properties are worth more vacant. You can try cash for keys if you'd like. Some leases do incorporate a clause where they can be cancelled with some degree of notice upon sale so double check!