There are many reasons why you might suddenly decide – or need to – sell a rental property that you own. The entire process can be complicated, and there is a lot of keeping to the right side of the law.
Nevertheless, sometimes this needs to be completed in a relative hurry. Perhaps you need the money to purchase another property, either for yourself or to increase your portfolio. Or maybe you own several rental properties and just want to cash out for retirement or some big investment. Sometimes, you could need to sell a rental property that has someone currently living in it.
To be clear, we are not talking here about evicting anyone. It is actually perfectly possible to sell on a rental property and pass the tenants on to the new owner as well. In fact, this is nearly always preferable; it is certainly what the tenants themselves would prefer (not a trivial consideration) and it means less no-rent downtime for the new owner, who can start earning straightaway.
Selling a Rental Property
However, selling a rental property with tenants is a slightly different process from selling a vacant property. This will become apparent right from the start of the process. For example, it can be difficult to stage the place for viewings and listings photographs when there are people living there.
Nevertheless, this is also not impossible and there is also the fact that the new owner is not going to live there, and there usually isn’t a need to truly show off the living quality of the place. There are already people happily living there and happily paying their rent, so that is normally enough.
A property’s livability isn’t the only important thing for a potential new owner though. It is a landlord’s responsibility – in fact, the law – for regular maintenance to be performed and for repairs to be seen too. If that bedroom ceiling is about to fall in on account of damp, the owner rather needs to be aware of this.
Nonetheless, you can show the property to potential buyers without conducting the whole home viewing rigmarole. CityHome Collective, a real estate brokerage specializing in luxury homes around Salt Lake City, note that all this information can be supplied on property sites or in descriptions of the property.
Advantages of Selling an Occupied Property
One positive way of seeing the difference between selling an occupied property instead of a vacant one is to consider the advantages. Here are a few:
No Need to Wait
As soon as you sell your occupied property, you can move on right away. Sometimes, having to wait for a lease to run out can hinder your ability to play the market and move at an opportune time.
Makes for a Better Investment
For investors, it is always attractive when a new investment can start showing a return immediately. With an occupied property, the purchase becomes an income straight away.
Disadvantages of Selling an Occupied Property
And here follows a few of the downsides:
Smaller Buyer Pool
For all the advantages, there are some things about an occupied property that can be off-putting. For families, having existing occupants is not ideal and, naturally, any private individuals wishing to buy the product to live in might also be put off.
We mentioned above the difficulty of arranging viewings and listing photographs when the house is occupied. It is worth stating again though that these also might not be necessary.
As with all property types, an occupied rental property is attractive to certain buyers, and unattractive to others.