Start with the lease
Before you list, reread the lease. Look for the end date, renewal terms, rules on access and showings, and any clause about a sale. In many places, a sale doesn't end a lease. The buyer usually steps into your shoes as landlord until it ends. Landlord-tenant rules vary by state and locality, so check them or ask a local attorney.
Option 1: Sell with the tenant in place
This works well when you're selling to an investor who wants a rental with rent already coming in. A reliable tenant on a fair lease can be a selling point.
It can shrink your buyer pool, though. Buyers who want to live in the home may not want to wait out a lease, and some loan programs expect the buyer to move in within a set time.
Option 2: Wait for the lease to end
If the lease ends soon, you may get a better price selling the home vacant. You can stage it, show it on your schedule, and appeal to buyers who plan to live there. Plan for the months with no rent, and give any required notice of non-renewal on time.
Option 3: Agree on an early move-out
Some sellers offer the tenant money or other help to move out early. This is sometimes called cash for keys. Put any agreement in writing, with a move-out date and the condition the home should be in. Ask a local attorney to review it.
Showings with a tenant at home
Your tenant's help matters. A few steps make showings easier for everyone.
- Tell your tenant about the sale early and explain what to expect.
- Give the notice your lease and local law require before each entry.
- Group showings into set windows to limit disruption.
- Consider a rent credit or cleaning help in exchange for cooperation.
- Take listing photos when the home is tidy, with the tenant's agreement.
What buyers will ask for
Have these ready to share once you have an interested buyer.
- A copy of the lease and any amendments
- Rent amount, payment history and the security deposit held
- A signed tenant statement confirming the lease terms, often called an estoppel certificate
- Records of repairs and any open maintenance requests
Deposits, rent and taxes at closing
The security deposit usually transfers to the buyer at closing, and rent for the month is often prorated. How this works can vary by state, so ask your settlement agent. Selling a rental can also have tax effects that a primary home sale doesn't. Talk with a tax professional before you list.
