Trying to sell rental property with tenant
Hello all!!
So, my husband and I got our first property, fixed it up, and got a tenant in it. We now need to sell the house, but we want to make sure we are taking the right steps in doing so with a tenant in place. I have read up about it, and it seems like it might be a little tricky. The tenant is on a fixed term lease, section 8, and we have no lease termination due to sale clause in our lease. If there are any agents out there that have experience with this type of situation, please reach out to me. I will be contacting agents in the Birmingham area, as well.
Thank you all ahead of time for taking the time to respond!!!
@Crystal Thomas It can be sold with a tenant in place and is done all the time. The trick is to make sure that the tenant will cooperate and that the numbers for rent and your asking price align with what an investor would pay and makes sense to them for cash flow! When you find an experienced agent, they can make sure all of this happens. Best to find one that works with investors, Im sure if you look on here under "find an agent",you will find one that is attune to what investors search for and want in your area.
Quote from @Kim Meredith Hampton:
@Crystal Thomas It can be sold with a tenant in place and is done all the time. The trick is to make sure that the tenant will cooperate and that the numbers for rent and your asking price align with what an investor would pay and makes sense to them for cash flow! When you find an experienced agent, they can make sure all of this happens. Best to find one that works with investors, Im sure if you look on here under "find an agent",you will find one that is attune to what investors search for and want in your area.
Thank you for the response Kim. I will definitely search for an agent on here.
Hey Crystal, really easy to do this as long as the tenant cooperates with viewing the property. You can sell it to another investor who may want to buy it with the current tenant, or because there is a change in ownership, they should be able to file a motion to vacate with a 60-day notice after closing. We have done this multiple times so just something you have consider. I will also so you will have some buyer's agents say the home has to be delivered vacant. Don't ever accept that! There is no guarantee they will close and then you could be out a renter. Always let the new owners decide on if to keep the tenant or not.
Hi Mitchell,
Thanks for the advice. Some new information I did not know about the 60-day notice to vacate. I appreciate you taking your time to help!
Contracts transfer with the sale of the home. If your Tennat still has six months left on their lease and someone wants to buy the property, the Buyer will have to honor the lease or they can negotiate something new with the Tenant after the sale closes.
I think you can only give the Tenant a 60-day notice if the new owner intends to occupy the property.
So I purchased a duplex earlier this year and it can with tenants in both units. One of the tenants was section 8 and the process was really easy to transfer the landlord information over to my name with the city. And like the other responses said, the lease carry’s over this the sale.
@Crystal Thomas, will you get the best price from an investor who wants this tenant in place OR from an owner occupant?
It sounds like a single family home and often times an owner occupant will pay more than makes sense for an investor. If so, you may want to consider making the property vacant before listing it for sale because it will show better and an owner occupant will want/need to move in and isn't prepared to deal with getting a tenant out.
I recommend discussing with your agent.
#3 All Forums Contributor
- Investor
- Austin, TX
Whats your question? You can sell to an investor and promote cash flow, if your concern is showings you will have to give prospective buyers notice to let tenants know 24hrs in advance.
Quote from @Crystal Thomas:
Hello all!!
So, my husband and I got our first property, fixed it up, and got a tenant in it. We now need to sell the house, but we want to make sure we are taking the right steps in doing so with a tenant in place. I have read up about it, and it seems like it might be a little tricky. The tenant is on a fixed term lease, section 8, and we have no lease termination due to sale clause in our lease. If there are any agents out there that have experience with this type of situation, please reach out to me. I will be contacting agents in the Birmingham area, as well.
Thank you all ahead of time for taking the time to respond!!!
everyone is doing this in Birmingham, either you sell it in roofstock or sell to an investor-RE agent itself in Birmingham (plenty overthere). it's not tricky, all those guy handle this situation all the time.
I'd read and then re-read @Kevin Sobilo's post above . . .
It's different in each market AND its different in different locations within the same market, but this is a critical question.
My brokerage in Salt Lake City was working with someone that came from Austin and this calculation was critical. Sale value of their tenant-occupied single family home to an investor was around $550k and to a homeowner around $775k.
I've had clients in Oklahoma City who have the exact opposite situation. A homeowner would pay 20-25% less than an investor for a property.
So, find a REALLY good agent who knows your market and pay them whatever they ask to be your asset.
just curious - why do you "need" to sell?
Is the property still available? If it's let me know.
@Crystal Thomas I am a real estate agent in Birmingham and have sold several tenant occupied properties. I can definitely help you with this property.