Working around your tenants can make selling a rental property nearly impossible. We’ve come up with a few solutions to help you work through this dilemma and get you sold.
The day has finally come when you are ready to sell your old rental property down in Florida. You’ve made back your investment and are set to make a major profit. The only issue is that you still have tenants living in the house. While selling any home is no walk in the park, selling a rental property in Florida certainly comes with its drawbacks. A lot will ride on how willing your tenants are to cooperate and for much longer their lease is. If you can’t strike a deal, get ready for a frustrating ride.
Wherever your property is located, you would do best to make the transition as seamless as possible for your tenants. Let them know of your intentions for the property and keep them up to date on what to expect. The best possible outcome is that you can find a buyer willing to maintain their lease, allowing the tenant to remain where they are without any change.
If you see no other options, remember that it is still your property. If you can no longer afford to maintain it or need to sell immediately, holding onto a rental home is not financially wise. Don’t worry if you need some advice on what to do. We are here to help and to answer whatever questions you might have about selling a rental.
Understand Your Tenants’ Rights
Before you attempt to sell your rental, you should familiarize yourself with tenant’s rights in Florida. Under state law, tenants and landlords are both expected to observe the obligations of their contract. According to the Florida Residential Landlord-Tenant Act, landlords can only enter the property to inspect it or make repairs agreed upon previously by the tenant. Tenants must have reasonable notice beforehand and these appointments should be set at the tenants’ convenience. This means you cannot simply walk in on your tenants. They have a right to privacy in their home.
If you are wondering what this has to do with selling the house, to find a buyer, you will first have to bring people around to view it. Tenants will have to be informed beforehand that buyers will be scrutinizing their home. Only after tenants agree on a set time can you bring viewers around. This can lead to major delays and lead some buyers to look elsewhere.
So, what about asking tenants to leave the property before you close on a sale? This depends on their lease. If your tenants are currently renting month to month, the law requires that you give at least a fifteen-day notice. You cannot simply evict your tenant on closing-day. If your tenants are renting through a specified lease, there should be a clause detailing how much notice to give. Regardless, it’s a sign of good faith to provide your tenants with a written explanation and provide them as much time as possible.
Following the letter of the law is essential. If you are transparent with your tenants and can find a good buyer, the selling process shouldn’t be too painful for anyone involved.
Sweeten the Deal For Your Tenants
If you’re planning to list your property on an open market, you would do better to wait for the tenants to move out. As mention before, selling this way requires that you bring potential buyers around to view the property. Though it’s not impossible with tenants in the house, you will quickly find it to be more hassle than it is worth. If you wait until a tenant’s lease is up and they leave the property, you can sell the house as you see fit. Buyers will also be more ready to make an offer knowing that they can move in as soon as possible.
However, not all tenants are keen to help with your sale. They may be resistant to moving out of their home, just for you to sell. If you are experiencing an uncooperative tenant, you may find that options are limited. Under Florida law, as long as they have not broken the terms of their contract, they are legally protected from having their home sold out from under them.
If you intend to sell the property quickly and cannot wait for their lease to run out, you can increase tenants’ willingness to participate by incentivizing the process. Offer to help them through the transition by paying for any moving fees, security deposits, or their first-month rent. You can even try buying them out from their lease if they seem exceptionally resistant.
If you manage to finally bring uncooperative tenants to the table, be open about how they should keep the property when you bring buyers around to view it. Explain that the house should be kept tidy and that any valuables left out should be hidden away. Kitchens, bathrooms, laundry rooms, and any other part of the house that quickly becomes dirty should be cleaned regularly. We recommend writing out a list of your expectations to make it more straightforward.
If tenants remain resistant, keep in mind that many real estate agents will be hesitant to bring buyers around. Organizing a viewing becomes overly complicated if tenants cannot make time in their schedules for buyers to come to view the property. One final consideration is to offer to help find them a new rental. If you can get them set up with a new home, they will feel ambushed when you inform them of your intent to sell.
Approach the Situation With Empathy
Don’t forget that, although it is your house, the property is still your tenant’s home. Being displaced from where you have built a life is incredibly difficult and can cause a lot of stress. Therefore, you don’t want to spring this on your tenants at the last moment. Going back to what we said earlier, your best bet in this situation is to give tenants as long a notice as possible.
Don’t go into this process lording over your tenants. Treat them as you would like to be treated, over to help out from a place of sincerity, and be respectful. If you go at this together, you can more easily set up a schedule for when buyers can come to view the house. Become a team and you will find that selling is far easier.
Offer the House To Your Tenants
Another option is to sell directly to your tenants. If they are already happy living in the house and have made a home there, why not make it available to them? This simplifies the entire process of finding a buyer and cuts out nearly all of the headaches involved with selling a home with tenants.
You’ll find that most tenants are willing to buy their home and may even pay more than other buyers, just so that they don’t have to move. If they agree to your proposition, consider talking to a real estate attorney to help smooth out the process. An attorney can help set up the sale to benefit both you and the tenants.
Remember that your intent is still to earn a certain amount from the sale. Tenants will appreciate a sale that benefits them but when you go into negotiations, don’t wiggle more than you can afford. Be clear about any inspections, true home value, and any contingencies that might affect the sale. You could even set up a contract for the deed. After they pay a certain amount, they’ll receive the title, but until then, you retain ownership of the property.
Think of this as a rent-to-own agreement. If tenants can not afford to buy your property outright, and they are unsure if they will qualify for financing on a mortgage, setting up this sort of arrangement is a win-win for both of you. They get to keep their home and you set the sales price. If at a certain time, the tenant can no longer uphold their end of the contract, you can simply move on to a different buyer.
Sell to a Cash Buyer
Once a tenant has either moved out or agreed to cooperate with the selling process, you can begin the next step. Selling a house requires a lot of work. You will need to make repairs, clean up the property, possibly do some lawn maintenance, host open houses, get in touch with a real estate agent, and begin showing the house.
If tenants are still living in the property, getting all of this done on time will likely prove impossible. Rather than going through the long, drawn-out process of fixing up and selling your house on the open market, why not sell directly to a company experienced with buying houses “as is”. Here at My Florida Home Buyers, we are prepared to make you an offer for your property, even if it needs repairs.
We’ll take care of the legalities, value your property, and come back with an upfront cash payment. When we make you an offer, it’ll be a net sum; what you see is what you will get. We don’t hide any commission fees and we also take care of any closing costs. All you need to do is provide us with your home’s details and we take it from there.
If you give us a call, we can set up a time the fits both yours and your tenants’ schedules to inspect the home. We look for any damage, make note of how many bedrooms and bathrooms there are, take a few pictures, and then research the total value of your home. Once we have an idea of what it is worth, we’ll give you a fair and honest price. Our goal is to benefit our clients, not just flip houses for the highest profit.
You will save time and effort by skipping the difficulties of finding a buyer and renovating the property. If you accept our offer, we send it off to a local attorney, get the papers drawn up, and send it over for you to sign. Once everything is formalized, you’re good to go. We can cut you a check or have the money deposited directly into your bank account.
From there, all you have to do is get your tenants moved out. As we have said throughout this article, it’s best to help as much as you can. They will appreciate your warmth and do their part to make the transition as smooth as possible. We recommend going back and looking at the ideas we offered for how to sweeten the deal for them. After they’ve moved out, we will take it from there. There’s no need for you to tidy up. We will fix up the property and put it back on the market to sell at a higher rate.
Selling a rental property comes with a whole host of legal technicalities and a dash of interpersonal tightrope walking. Unless you can get your tenants to cooperate with the sale, you will face an uphill battle just to be rid of the house. Fortunately, you have more than a couple of options. You can wait for your tenants’ lease to end, then give notice that you intend to sell. Of course, if you need to sell pronto, waiting out their lease isn’t exactly an option.
If you can’t wait, consider sweetening the deal for your tenants. Offer to help find new accommodation, pay their security deposit or first month’s rent, help them to move, or pay for their transportation fees. As soon as you can get the tenants out, you can begin renovating and getting the house ready to sell. If you can’t wait even to fix it up, we are here to help. Give us a call at (352) 519-4512 or submit your info through our online form. We are ready and standing by to offer you the best price for your property and get you sold today.