Can You Sell a Property Occupied by a Tenant?

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While you may initially invest in properties to hold them over the long term to earn a regular income or pass them off to their children, plans can change easily in the future. A great selling offer may arrive that lets you retire comfortably or you may be looking to move elsewhere without a rental to think about.

However, if a great selling price is offered that satisfies you but your rental is still occupied, are there steps you can take to avoid any conflicts? Keep reading this article to learn more!

The Challenge of Selling a Property with a Resident

If tenants are still staying in your rental unit when you want to sell it immediately, this can be a tough situation. While property owners still have several options here are some of the issues they will likely encounter.

Complicated Legal Affair

State laws and city rules can differ regarding legal options so you need to research in-depth. Your lease agreement may bind you to honor specific terms and conditions. The property location will also play a role in making it a difficult case. Tenants may lawfully stay even if the owner requests them to end the tenancy.

Diverse Factors

Selling your property requires evaluation of multiple factors, such as the market demand, conditions of the lease agreement, local laws, and the cooperative nature of the renters.


Outcomes can also be unpredictable since home buyers will have different timelines in using the purchased real estate. Some may agree to wait until the rental term is over, while others won’t.

Month to Month Leases

With a short-term monthly rental schedule, it is often easier to request a renter to vacate the unit. You can simply inform the renter 30 or 60 days in advance that you wish to end the rental arrangement. This can be done without providing a strict reason or offering a longer notice period.

Fixed Term Leases

With fixed-term leases, it can be generally complicated to ask renters to leave, especially if they had paid the rent on schedule and remained compliant with the lease terms and conditions. They can legally stay until the leasing period expires.

Uncooperative Renters

If you have stubborn tenants who are uncooperative, then it will be tough to sell your property. You may even face resistance when you arrange for a property viewing from potential buyers. In addition, the renters may cause damage if they feel frustrated about the unplanned move-out.

How to Deal with a Renter That Won’t Leave

Not all tenants will be willing to vacate your rental space, so you need to handle the situation respectfully.

You can consider the following options:

Sell the Property to the Renter

You can market the property to renters if they intend to stick around for a long time. If they have lived in your unit for several years, they may find it challenging to move elsewhere and begin a new life. To find a common ground that satisfies both your wishes, you can offer to sell the rental to them.  

Make a Buyout Offer

You can present the current renter with a financial incentive. Cash can make a renter open to ending the lease early and moving out at a specific time. How much cash you offer will vary depending on the situation.

Inform Homebuyers about the Dilemma

When your rental is in an excellent location, the market demand can be high. Some homebuyers are willing to wait until the leasing term ends and the renters need to move out. However, you should not expect this easy acceptance since most homebuyers seek to occupy a property they bought right away. 

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Offer to Sell the Unit to Other Investors

Since homebuyers are looking to move in right away, it is worth considering selling the rental to another investor who values the passive income they can potentially earn from the investment property.

Some investors may view an occupied rental property as a positive sign since they won’t be looking for interested renters anymore and will have a ready tenant to serve.

Ways to Sell a Rental Property Occupied by a Tenant

The great news is that property sellers have multiple options to sell their property easily. They can

  • Time your selling decision: Perhaps you can list your property for sale as the rental term is nearing. This eliminates a lot of conflicts. However, you also need to assess the present market condition.  Under a seller’s market, you will find that buyers are more flexible.
  • Partner with a property management company: If you receive support from a property manager, it will be easier for you since these companies can oversee the property, offer useful advice for property selling, and support the final sales proceeding.
  • Hire an excellent lawyer: Since selling a property occupied by a tenant can be complicated, you need to be guided by a legal consultant who has an in-depth understanding of the law and can offer many effective options that are lawful.

Bottom Line

Although it can be a tough challenge to operate a rental space on your own, selling it when it has a current resident can be harder.  The wonderful thing is that property owners have other options, such as getting in touch with a trusted property management company with solid industry experience.

If you are looking to improve your property management, contact Bigham & Associates today!