Bad time to sell? Cratering Demand in Current Economic Climate

[Chad Andrews]

Hi all, long-time reader, first-time poster.

I’m seeking input on selling an out-of-state rental property in the St. George, Utah area this summer.

Main concern: We lose our good tenants, and the house languishes vacant for many months. Demand seems to have cratered and will continue to do so in this current economic/political environment, but I’d love to be proven wrong. My father in NC has seen visitations plummet on his active listing since early April, following the tariff announcements.

Details

-3BR 2BA, 1700 sq feet. Bread-and-butter property

-Good tenants who are want to stay

-Rental lease ends in late June (lowest selling season for STG)

We aren’t really real estate investors. This was our former home, so we’re on the hook for cap gains by July 1 2026. We would like to sell this property for numerous reasons, but mostly because we want to cash out for another purchase in our new town.

Possible action plans

1. List the property when the tenants leave (late June) and hope for the best

2. Sign a modified lease that allows us to list in spring 2026. That's the best-selling season in STG, I'm told. Downside: economic conditions worsen, which I feel is likely.

3. Try and sell with tenants in place on a month-to-month lease. This allows us to keep our tenants, but listing with tenants seems tricky, considering the market is already tight.

I'd love to hear your thoughts!

[Dan H.]

Quote from @Christine Mulkins:

Even if the tenants are on a lease, if you end up selling the home and the new owners don't want to keep it as a rental, the lease will no longer be valid and the tenants will have to move. I've sold a home with tenants in place and the new owners wanted to occupy the home as their primary residence. In Oregon, where I live, I had to pay my tenant 1 month's rent when we sold the home, per Oregon landlord/tenant laws. I'd look into the laws in Utah. 
If you're wanting to take the cash to buy another rental, you may consider a 1031, in which case you'll avoid the cap gains. 

 >Even if the tenants are on a lease, if you end up selling the home and the new owners don't want to keep it as a rental, the lease will no longer be valid and the tenants will have to move.

This is not correct.   The new owners are obligated to abide by the lease until the end of the lease.   If the lease is month to month, then in most markets you can get the tenant out by giving the required notice to the tenant.  However, if the tenant has 6 months left on the lease, the tenant has the right to stay the 6 months.  The owner can try to negotiate with the tenant, but the tenant is not obligated to accept any offer.

Good luck