Any advice on selling the home with tenants already there?

Question

We may (not fully sure) sell our duplex in the next couple of months. However, we have a tenant in there and are looking for another one in the meantime for the other unit. For those of you who have sold a property with tenants already in place, have you run into any issues during the sale? One of my biggest concerns is making sure the tenants we have now aren’t forced to move out when the property changes hands.

Jennie Ballard · Answer

You need to check your state laws. In Texas, the lease continues as written. A tenant in good standing can only be forced out if new owner occupies their unit as primary residence. You will need to have rent and deposit history availble for review.

Rick Albert · Answer

If it is fully rented, then it comes down to numbers, not comps. No one will care if the duplex next door sold for $500,000 if the numbers only work at $400,000.

I've had much better luck selling duplexes when they were fully empty. I sold my last house hack with a tenant in the back unit and I got push back from buyers who wanted it for extended family.

Versus I bought a duplex out of state with a tenant and then sold the property 100% vacant a few months later (had problems getting it rented) and actually sold at a premium.

Diana Khan · Answer

@Mose Gebremeskel, since you’re still deciding whether to sell, I’d think carefully about how you lease the second unit right now. If you sign a new longer-term tenant, that could change the type of buyer the property appeals to and how much flexibility you have when you’re ready to list.

I’d also keep the lease, rent history, deposit records, and any tenant communication organized so a future buyer can clearly see how the property is being managed.

Since you’re using a mid-term rental strategy, that may give you a little more flexibility depending on your timing. I’d just make sure the leasing plan and the sale plan are working together.

Bill B. · Answer

You will get at least 10% less if it’s fully occupied. You can only sell to an investor who wants a deal. Keep one empty for an owner occupant.  They’ll need to move within 60 days  and they are your preferred buyer.  Ps. This ignores the buyer/landlords that don’t want your tenant they didn’t screen.

Any advice on selling the home with tenants already there?

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