According to NOLO, while you can sell your tenant-occupied property, almost all U.S. jurisdictions give tenants the right to remain on the property through the end of the lease. This includes properties occupied under midterm rental agreements, which are becoming increasingly popular as they cater to tenants needing housing for several months but not a full year. Such properties can be particularly appealing to a specific set of investors who are looking for less turnover than traditional vacation rentals but more flexibility than long-term leases. Simply put, the lease would transfer to the new owner and the new owner would become the tenant’s landlord. Yet how many home buyers actually want to become landlords rather than move into a new home? We put together some creative ways to find interested buyers for tenant-occupied rentals, including those occupied by midterm tenants.
Even though the home sale might be the best choice for you, there are ample other real estate investors who would be interested. In fact, the single-family rental market is a $70 billion annual opportunity, and growing, and there are platforms like Roofstock dedicated to rental property home sales. Through Roofstock, you can retain your rental income until closing, complete the process entirely online, and save money with a 3% transaction fee.
This option would be especially fitting for landlords with problem tenants, squatters, or month-to-month leases. And there are companies like House Heroes, who will give you a cash offer based on local comps, which you can choose to accept if appealing to you.
For tenants who consider your rental property their home and are in good financial positions, they may be interested in purchasing the property. You could also consider an option where the tenant makes mortgage payments to you instead of a rental payments.
Before selling your property, we recommend consulting a lawyer to make sure you know your state laws and tenant rights. For more guidance, visit Landlordology’s post on tenants’ rights when selling an occupied property.
Related: Forbearance vs. Deferrals, Rent Forbearance Programs- Develop a Plan