Today we are answering the question: Can I sell My Rental Property with Tenants In It? We wrote this blog a few years ago and it was a big hit, it’s our #1 blog post of all time, so I wanted to update it with a quick video version.
So, can I sell my rental property with tenants in it? The short answer is yes! The lease is a legal document and it survives the sale so you are allowed to sell the property and transfer ownership but you, or the buyer, would have to still honor the lease. In my opinion, the real question is, SHOULD I sell my rental property with tenants in it? While you can, it doesn't necessarily mean it is the best option for you. Today I’m going to briefly touch on a few of the pros and cons to selling your rental property with tenants in it or what we would call occupied.
PROs
- You don’t have to disturb the tenant.
- You can list it immediately.
- It can be less costly (no unit turn costs if the tenant is still there)
CONs
- Your buyer pool will be limited to investors, which may net less money
- May not show as good
- It’s definitely more difficult to coordinate showings, inspections, the appraisal, etc.
- You run the risk of upsetting the tenants and having unpaid rent, even an eviction, or a midnight move. If you sold it as a rental property and the tenant doesn’t perform (pay rent) or moves out last minute before closing, it could kill the deal.
As with everything in life there are pros and cons when it comes to selling your rental property with tenants in it versus selling it vacant. Personally, we recommend selling the house vacant if possible. Targeting end users or homeowners will allow you to cast the widest net possible and in most cases, maximize your return.
If you have questions about any of this or if we can help in any way, consider us at Landmark Property Management a resource, we’re happy to help. Feel free to check out our website at ChicagosPropertyManagement.com or give us a call.
