Rental properties are considered a great source of passive income, but anyone who has owned and operated them knows the amount of work required doesn’t necessarily meet the passive description. Between the ongoing maintenance and constant search for the right tenants, it’s easy to get exhausted.
If you’re looking to leave the landlord life behind and are feeling stuck because you have existing tenants with a lease, there may be more options than you think. Check out these five strategies for selling your rental property with tenants that will help you close the deal quickly.
Hearing about big changes in your living situation can be unsettling, so make sure you keep the lines of communication open with your tenants throughout the sale process. While you may own the property, renters have rights that must be honored. Keeping them in the loop allows renters ample time to prepare for a move, and will likely make them more cooperative when it comes to necessities like planning showings or completing maintenance.
Find an Investor
Often the most cost-effective and efficient way to sell a property with tenants is to find the right investor. While any existing leases will legally remain in place for the remainder of the term, investors provide numerous advantages over traditional real estate agents. For one, there’s no need to show the property and deal with the hassle of scheduling numerous showings with your tenants. Additionally, companies such as Rapid Housing Solutions have experience operating rental properties to help make the transition as smooth as possible for all parties involved. In many cases, they will even pay the closing costs to help you get the deal done fast.
Make It Month-to-Month
When it comes to month-to-month leases there are numerous pros and cons. On the one hand, you can typically charge a higher monthly rent for this type of agreement. On the other, you don’t get the long-term security you would from a year-long contract. Though there’s some risk involved, month-to-month provides owners with the most flexibility to sell their home free and clear of renters. This allows you to continue renting the property and collecting income, but offers an easy out as soon as you’re ready to sell.
Sell to the Tenant
Long-term, low-maintenance tenants are typically a landlord’s dream. If you’re lucky enough to have a strong relationship with your renters, consider offering them the first opportunity to purchase your property. After many years of happy memories in the home, they likely feel connected and would appreciate being involved. Depending on the work they’ve put into it, you could even offer them an incentivized deal to reward all of their extra efforts. As an added bonus, selling to current tenants helps resolve any outstanding lease issues.
Offer Added Incentives
If your tenants aren’t interested in purchasing the property and still have a substantial lease, consider what you can offer to pique their interest in exiting early. One of the most difficult things for renters to do is come up with a hefty security deposit. In exchange for agreeing to terminate the lease early, you could offer to pay the security deposit on their next home. If that option seems too costly, covering the expense of movers and a truck could also help move the needle. Of course, laws vary from state to state, so be sure to verify the legality of any agreement first.