Whether you are a seasoned landlord that has seen it all or a landlord that has one house and a great tenant, there will probably come a time when you want to sell a tenant occupied house. You may be thinking it’s not going to be a problem. Selling any home in this market can be a challenge, but selling one with a tenant can completely exasperate you.
Look at it from the tenant’s point of view. They live there right now and chances are, they don’t want to move. From their point of view, you are asking them to inconvenience themselves by allowing strangers to traipse through “their home” at all hours of the day and possibly the evening. When you sell the house, they will have to move if a retail buyer bought it. They may still have to move if an investor buys the house and wants to make changes. Why should they make it easy for you?
The one thing you don’t want is an angry tenant
Think about the damage they can do. Then think about what they could tell a potential buyer if given half a chance! They have actually lived there for a period of time and they should be familiar with the home, how it is maintained, any problems the home might have and the quality of the neighborhood in general. If they are angry, they may remember things differently than you do.
If you want to have a chance of selling that house, you need a plan. You need to try and get the tenant on YOUR side so that you can sell the house quickly.
Download Your FREE Rental Application Form!
It may seem like a small thing, but having a solid rental application is the first step in finding great tenants. Since BiggerPockets is all about helping you succeed in real estate investing, we’ve put together a complimentary Rental Application for you to use. Download it today and go find some great tenants!
10 Tips for Selling a Tenant Occupied House.
- Sit down and explain to them what the situation is; that the house is for sale and you would like their help.
- Assure the tenants that they are not going to be booted to the street with no warning and that they will have “X” amount of days after the contract is signed to move.
- Promise them that they that they will be notified prior to any showing of the home.
- Let the tenants know that they will also be notified prior to any home inspections, appraiser visits, etc.
- Offer to compensate the tenant for every time they allow someone to view the home. You will have to decide on an amount, but consider paying them $10 every time the home is shown payable once the house closes.
- Offer to give them a gift certificate of some kind to a store of their choice when the home closes.
- Ask what you could do to make this process easier for them.
If the tenant is really stubborn, you may have to resort to one of the “big 3” below.
- Offer some type of bonus for leaving the home in top notch condition when they move out. For instance, you could offer them an additional $100.00 bonus in addition to the return of their security deposit.
- If moving expenses are the problem, offer to reimburse them for the cost of the moving truck. Help them move on.
- If the tenant is really stubborn, you may have to resort to the “cash for keys” plan. If the sale of your property hinges on getting these folks out of the house this will certainly prove to be a lot easier and less costly than an eviction.
Get the tenants on your side!
While the last couple of suggestions may sound crazy, stop and consider this. Angry tenants can do a lot of damage to your property!
Time is money and the faster you get the house under contract and sold, the sooner you can move on. Your job is to get the tenant to help you sell the home.