Benefits and disadvantages of selling a tenanted property
Like with most situations involving 2 parties, there are positives and negatives to the situation. It may seem that selling a property with sitting tenants is just negative. It involves evicting people, it is hard to have viewings, and there are a lot of hassles, but like with any situation, we can always find a silver lining.
Those who are renting a property at the time when their landlord chooses to sell it are referred to as “sitting tenants.” Let’s try to find the silver lining in selling property with sitting tenants:
Advantages of selling a rented property:
- Investment properties may be highly desirable to investors for a variety of reasons. This is especially true if you have a good renter who wishes to stay and is paying market-rate rent. Hence, potential buyers will have the leverage of acquiring good-paying tenants without the trouble of looking for themselves.
- You can sell your tenanted home as-is, which eliminates the need for costly renovations, redecorating, or repairs.
- Another advantage of selling an occupied home is that you may keep receiving rental income while your house is on the market and even after it has been purchased.
Disadvantages of selling a rented property include:
- Renters generally do not like outsiders wandering into the house they are renting, which makes it difficult to show the property to prospective buyers. They may make it hard to inspect the property or impose unnecessarily restrictive showing rules.
- Tenants often can’t be evicted until their lease ends when rental properties are sold. This is a disadvantage if you are selling a tenanted property since the trouble of looking for a new home is shouldered by your current renters, and they might not be in a rush to find one. There are legal routes to go down to evict a tenant by simply giving them sufficient warning and notice, but this can be costly and start a contract dispute.
- There are certain tenants who love to chat while they are home for showings and what they say may have a big influence on the sale. Some may point out every single flaw in the home, while others may say whatever they can to scare away potential buyers, even if the information is misleading or false.
