How Do You Sell A Tenant Occupied Property?

There are many things to consider when you decide to sell a tenant occupied property. Contact a real estate agent and get help evaluating whether the current market is a sellers market or a buyers market. Perhaps it is a sellers market, such as we have today. There are too few properties and way too many buyers. The property will probably sell quickly. It might be better to sell the property vacant. If you decide to sell the property vacant, you will need to determine how long you can sustain the property with no rent being collected.

After you determine that you are ready to sell, you need to find out “Can or does the tenant want to buy the house?” If they do want to buy, you need to get a professional loan officer involved and get the loan approved in a timely manner. If the tenant can not purchase, make sure that all your notices and inspections are in writing. There is nothing more frustrating or annoying than “He Said” “She Said” or “They Said” and it can lead to litigation. Also make sure that you are not in a long term lease; you must be in a month to month rental agreement with your tenant, or it can become very costly. If you decide to sell the property with the tenant living in the property, there are some things that need to be determined to get the best price for the property. First, you need to consider how the property shows with the tenant in the property. Will they cooperate with showing the property and with all the required inspections once an escrow is opened? Will they keep the property in marketable condition during the listing period? The situation can be improved by offering incentives to the tenant, but only after they have agreed to cooperate with your requests.

You should also make a visit to your tax accountant before you list the property to see what the tax consequences are for selling a rental property. I am not a tax advisor, but there are times when it makes good sense to sell a rental property. There is also a way to keep from paying the taxes on the sale of a rental property with a Tax Deferred 1031 exchange. Please see your accountant on this.

If you have any questions about selling your rental property please contact me. This is a great time to sell.

Leave a Comment