Problems selling a tenant occupied property

7 Replies

I’d like to get some input from other investors on a current situation I’m in trying to sell a tenant occupied property.

I recently moved for work to Tulsa from Oklahoma City and have been trying to sell my last primary residence so I can qualify for a new home. The home has been on the market for 4 months and I’m not sure if it will sell anytime soon so I might put renters in it. I own another property that is currently tenant occupied.

To help clean up my debt-to-income ratio I decided to put my rental property up for sale as well. The new tenants just signed a 12 month lease in July. I spoke with them one time about 3 weeks ago and they seemed open and willing to work with me on selling the home. I even offered to reimburse them some moving costs as well as a relocation fee of $1,000 after the property sells.

Since then I have called 5 different times and left messages without them responding. Even the property manager and realtor have had trouble getting in regular contact with them. I went ahead and listed the property last week without hearing back from the tenants. The first day it was on the market we got a lot of calls to see the home. My realtor was able to get ahold of the tenants and gave them 48 hours notice before the showings.

Turns out these tenants live dirty lives. They aren’t necessarily destroying my property but they aren’t cleaning the floors, kitchen, or bathrooms. They haven’t mowed the backyard in a couple of weeks and have left beer bottles and other trash out on the back patio. Needless to say, the home didn’t show well this weekend and it upset a few of the potential buyers and their realtors. Obviously it upsets me as well. My realtor was able to get ahold of them again to let them know the place was dirty but they acted confused and a little put out. I tried calling again today but could only leave a message asking them to get in touch with me.

What would you do in this situation? I don’t want to bully and push the tenants out since we have a 12 month lease but I feel I need to sell this property. Since we talked about it once before I don’t feel like I’m surprising them with any of this. I was honestly trying to work with them to make this a smooth transition. My thought now is to stop by in person one day this week before we have another showing and hopefully make this whole thing right.


Hi @Ryan Ahlgrim  

Why not offer them the $1000 to vacate now and terminate the lease early? Then you can put the property back into move-in ready condition and get it sold!

Marketing a property to owner-occupants is extremely difficult when tenants are in place.


Sorry, but I am perplexed by the situation. Assuming you did not pay way too much for your rental and aren't charging well below market rent, how does selling a rental improve your DTI? Any decent mortgage broker will take 75% of gross rents as income and add back in your depreciation since it is a paper expense and ignore any losses that rental generates for tax purposes. If you don't have a good one, I have a great one. Message me for details.

Regarding the sale of a house while rented, the only time I have heard of that being successful with near 100% value homes is when people rent high end homes for dirt cheap prices to tenants with high end furnishings and know that they may have to move soon.  It's a way to get a little income or cover expenses while marketing a high end home that may take a while to sell.   The seller effectively gets a  $300,000+ home staged and maintained for free while receiving $600/month rent.  That's better than paying for staging or letting a high end home sit empty for extended periods. 

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get them out asap.  it almost never goes well selling a home with tenants unless it is multi family.  

Sounds like a bit of a nightmare. I actually bought two houses sight unseen in the last year with tenants already in there. Maybe you could get an investor to purchase it with the tenants in there. It sounds like it has good cash flow. Otherwise I would try to get them out like Rhett days. 

I just put my own house on the market in OKC as I won't be coming back to live there. The tenants are not happy and won't return calls either. However they will be out at the end of the month. 

Good luck.

Either get them out of unit or train them with treats.

Tell them you will pay them cash bonus if they help in selling your home for you.  Meaning everytime listing agent calls for a showing, make dang sure it's spotless and help the Realtor out but keeping junk out of way... Not sure of the amount but something you think they would salivate over for doing it a few times per week.

Like @Chris Simmons brings up, the DTI is not impacted that much. Your'e looking for cheese with other debt satisfaction. Need that, or out of a trap? Also, like @TAREK SAAD says:  I would reduce rent for them to keep it showable and give a cash bonus at the sale.  Rent reduction contingent on the realtor not stating it still can't be shown.  The realtor needs to bunch qualified buyers together to show all at once as often as possible to help reduce tenant inconvenience.    Worst-case scenario, you're selling next year at the end of these guys' lease.  Probably not the end of the world.