Did you know that you can sell your house with sitting tenants? It is a common misconception that you have to finish a contract with your tenants before you sell your property, which is just not the case. Selling your home with tenants is possible, and can come with a variety of benefits.
How Easy is it to Sell a Property with Tenants?
It can be very easy to sell your property with sitting tenants, as long as you work with a real estate agent with experience, and you have the correct tenancy lease in place. Selling your property with tenants can help move along the sale, and in some cases, make it quicker and easier to be snapped up by an investor.
In Connecticut, as long as the contract that a homeowner has with their tenant is up-to-date, legal, and contains the relevant clauses, the homeowner has the right to sell the house, while the tenant remains living in the property. This is because a typical rental agreement ties the tenant to the property, and not the owner. The new owner will be informed as the sale progresses and is obligated to honor the contract the tenant has in place. Many individuals will only purchase a property with tenants because they intend to continue renting it out as a landlord.
The Benefits of Selling a House with Tenants
There are many benefits to reap when selling a home with existing tenants. It may seem like a complicated process at first, but once you know more about it, you will find it pretty quick and painless.
Equity
If you own a property that you rent, it is a good idea to keep an eye on the Connecticut housing market and monitor the value of your property. You may find there comes a time where cashing out is worthwhile, due to the high value your property has gained. This will ensure you get as much equity as possible, without having to wait out any tenancy agreements.
It also works on the other end of the scale. If you can see the market declining, selling your home with tenants can help you cut your losses on a house with negative equity.
A Quicker Sale
You can sell your home quicker if you sell your home with tenants. This is because you don’t have to wait out the tenancy agreement, and instead, can sell your home with tenants still living there. This can save you a lot of time, especially if it is a long contract or you are provided to give a long notice period!
Rental Income
When you sell your house with tenants inside, you will continue to receive rental income right up to the date of completion, regardless of how many delays there are. You will also provide the buyer with the benefit of receiving rental income immediately after completion.
Attractive to Investors
Selling a property with tenants will open up your property to a whole new market – investors. Landlords are always looking for properties that they can rent out or build their portfolio with. You also eliminate the need for a new landlord to come and clean the property, furnish it, find new tenants, and go through the process with them. By offering a property that already has sitting tenants, your property will be much more attractive.
Less Disruption
There is much less disruption when selling your property with tenants, for both parties. You do not need to serve notice on your tenants and clean and repair the property before waiting to sell it. Your tenants don’t need to go through the ordeal of finding a new place and moving all of their belongings, especially if it was short notice or unexpected. When you sell your property with tenants, they can carry on as normal and you can easily put your property on the market, making it much less disruptive to both parties involved. Just be sure to be honest and transparent with your tenants.
How to Sell Your Property with Tenants
Are you thinking of selling your property with tenants? Here are some simple steps you should take to sell your property successfully.
Check the Tenancy Agreement
First and foremost, you should ensure that you have a legal tenancy agreement that covers the option of you selling your home while the tenants are still occupying the property. You should check the terms and conditions that were detailed in the contract and all the steps that you must follow to notify your tenants and stay legal and compliant. This might be conferring with your tenants and giving them a suitable amount of notice.
There are different types of tenancy agreements, so becoming familiar with yours before you take any steps is important. Here are some examples of tenancy agreements that you may have used:
- A month-to-month lease – this is where you will only need to provide 30-60 days notice
- A fixed term lease – this is where both parties have agreed to a certain period for the tenants to occupy the property and it must be honored by both parties, or penalties will be provided to the party in breach
- Early termination clauses – in some cases, leases may include an early termination clause
Speak to Your Tenants
Once you know the rules that you must follow when you begin thinking about selling your property with tenants, it is important that you speak to your tenants as early on in the process as possible. This will give them enough warning, and there is enough time to iron out any objections or problems that may arise. As long as you follow the steps in your tenancy agreement and do everything legally, there should be limited problems. It is also a good point to talk to your tenants about what they want to do if there are options for them to consider. For example, if they are on a month-to-month lease, you can serve them notice, or you can provide them with the option to stay in the property.
Keep your tenants up to date regularly, as they will need to prepare the home. The process of selling your property is going to involve your tenants and require their cooperation. Your tenants are going to have to clean the home and ensure it is in good condition as per the contracts, they will also need to provide access for real estate agents to take photos to list the property and to host viewings for potential buyers. Remember that your tenants will be impacted by your decision to sell your property, so communication as early as possible will help it go smoothly. You may also need to reassure them, and let them know that a new landlord cannot change their contracts and that they are protected by law.
Hire an Estate Agent
You will need to hire a real estate agent to help you sell your property. You must find a realtor who has experience with selling a property with tenants and has a market of investors that they can attract. Conduct research and look at reviews. This will ensure that you get the most value for your property, and out of the service that a real estate agent provides you with. Remember when you are selling your property with tenants, it is not just you and the buyer involved. Your tenants will be getting a new landlord and will have to participate in the process, for example, by providing access for viewings. An experienced real estate agent will ensure that the process goes as smoothly as possible for all parties involved, and will deal with the process with professionalism and integrity.
Selling your home with tenants doesn’t have to be complicated. In fact, it can come with a whole host of benefits if you know how to sell your property with tenants. Follow these top tips and contact Venture One Realty if you want to learn more!
