How To Sell A Tenant-Occupied Property

Occupancy SolutionsYou own the property, but tenants have rights too.

Scenario: You’re ready to give up on the landlord business, or maybe you just want to unload one of your investment properties. You own the apartment in Boston, MA, so you can sell it and move on, right?

It’s not always that easy.

Deciding to sell a house that someone else calls home — a tenant-occupied property — is much different from selling your old guitar online. Although you do own the place, as long as the tenant has paid rent, they have a right to live there.

Some tenants are terrific. They keep the home neat and clean and allow you to show it whenever you like. But others can be problematic, especially if they refuse to let you in or even change the locks on you.

No matter what type of tenant you have, it’s crucial to know where landlord rights begin and renters’ rights end.

If your tenant is on a month-by-month lease

Look up the laws of your state to determine how much notice you’re required to give your tenant to vacate. Usually, it’s 30 or 60 days.

Send your tenant a letter letting them know when their tenancy ends. Even if you’ve had an unpleasant landlord-tenant relationship and are thinking, “Don’t let the door hit you on the way out,” keep it to yourself! Politely ask your tenant to remove all belongings by move-out day and to leave the keys on the counter.

If your lease agreement allows, you can show the property with your tenant still in it. If not, wait until your tenant has moved out to show the place. “The key to rightful access is to give proper notice (generally 24 hours),” says Lucas Hall, chief “landlordologist” at

If your tenant is on a fixed-term lease

Unless your lease has an early termination clause that allows you to end the lease early, your tenant gets to live out the lease period, assuming they’re in good standing.

If your tenant failed to pay rent or violated any lease terms, you can terminate the lease.

Otherwise, hold out until the lease is up and your tenant is out to sell the property. Or you can start showing it while your tenant is still there … if your lease terms allow this and if you give proper notice before stopping by.

Sell to an investor

If you want to sell immediately but your tenant still has time on the lease, you could market the property to investors, who would be happy to have a tenant already in. This might be a tougher sale — your market will be limited, and the new owner would need to honor the tenant’s current lease.

Pay your tenant to vacate

Yes, you read that right.

Paying someone to leave your house might be your best option if you need to sell immediately.

But how much do you offer?

Do a quick Trulia search to find the average rent in your area. If typical rents are more than you’ve been charging, offer the difference multiplied by the number of months left on your tenant’s lease. You could also offer to pay any moving costs. If your tenant won’t budge, throw in some extra cash to pay the security deposit for the new place.

In the end, your tenant doesn’t have to accept any cash you offer. You might just have to wait.

Sell the property to your tenant

If your tenant really doesn’t want to leave, ask whether they want to buy the property. If they can’t get a mortgage, consider seller financing. Here, you’re the seller and the lender, letting your tenant make payments to you.

Know how to deal with problem tenants

What if your tenant refuses to let you show the place, even if you’re allowed to per the lease? You can enter anyway. But a hostile tenant probably won’t keep the house exactly show-ready and might even scare away potential buyers. So you may want to tread lightly until this tenant is out.

What if that tenant changes the locks? “Call the police, who can force the tenant to grant you access,” says Lucas Hall. “Or hire a locksmith to re-key the locks at the tenant’s expense.”

Consider incentives

Try sweetening the deal by giving a break on rent if your tenant cooperates, meaning they not only agree to showings, but they also make the bed, contain any pets, and clear the dirty dishes from the sink before prospective buyers come by.