Having a rental property is beneficial for many reasons. Assuming you can rent it out, you’ll receive the monthly cash flow, and you’ll typically have price appreciation as well.
In the Houston area, including the suburbs like Sugar Land, Pearland, Pasadena, and more, there are plenty of independent landlords.
However, things change, and sometimes selling a rental property makes the most sense. Many of these landlords then face the question: can I sell my rental property with tenants in it?
The short answer to that question is yes. The longer answer requires a little bit more of an in-depth discussion.
Selling Your Rental Property With Tenants in It
As noted in the introduction, yes, you can sell your rental property with tenants in it. There’s no law prohibiting you from making that sale. You are not beholden to your tenants, morally or legally, to keep the property.
Consider an owner-occupied home sale. What happens during this process?
- The real estate agent will walk through the home, taking numerous photos. They’ll post those photos on various home selling sites, and both buyers and agents will see them.
- Real estate agents will typically have open houses where buyers come in to look at the property. Finally, once you accept an offer, the buyer will typically have a home inspection and an appraisal, both of which require access to the house.
It is possible, of course, to do these things with tenants.
However, the “potential emotional and physical upheaval that comes with selling tenant-occupied homes makes them much more difficult transactions than selling owner-occupied or even vacant properties.”National Association of Realtors
It’s not easy for the tenants having people walking through the home all the time. It’s also not easy for the landlord because they still carry risk and liability while showing the property.
There are three reasons, in particular, why selling tenant-occupied homes becomes tricky.
- Prospective Buyers Are Wary of Buying Tenant-Occupied Homes – Homebuyers typically want to have certainty when they put in an offer, and buying a tenant-occupied home does not provide that. From the start of the transaction to the end of it, the house’s condition is much more variable than buying a home from the seller directly. A prospective buyer doesn’t know if the tenants will get mad and trash the place or even if they will accidentally cause some damage between now and closing. There’s already enough stress when buying a new home – adding tenants into that equation usually does not sit well.
- Tenants May Have the Legal Right To Remain – Tenants have the legal right to remain in the property up to and after the transaction completes. If you sell your Houston home, Texas law states that the lease transfers with it. In other words, the buyer must honor the original lease (there are some exceptions to this). The fact that a homebuyer cannot do whatever they want with the property is something most individuals and families won’t like. As such, you will restrict your market significantly.
- Homebuyers May Not Be Able To Get a Mortgage – Most mortgages require that the property become the buyer’s principal residence within 30-60 days. Lenders provide better interest rates and require less down on the condition that people move into their homes. The logic is that borrowers will likely pull out all the stops to save their own homes, so these loans are less risky for the bank. With tenants, though, this becomes much trickier for a homebuyer. Can they move in shortly after acquiring the property? If not, they may not be able to obtain a mortgage.
If you’re looking to sell your Houston home only to people that can afford it without a mortgage, you’ll have a much harder time finding qualified buyers!
A Cash Buyer Can Help
It’s evident that the answer to “can I sell my rental property with tenants in it?” is yes, you can, but using a traditional real estate agent will be difficult. Many clients with whom the agent works will probably either be uninterested or unable to purchase your home.
There is a way, though, to sell your home!
A cash buyer can take your rental property off your hands with a fair all-cash offer. This type of buyer has quite a few benefits for landlords:
- Quick closing means that you can get the property off your hands without much risk or liability.
- Since most cash buyers only require one visit and inspection to write an offer, you’ll provide minimal disruption to your tenants.
- You’ll receive a fair all-cash offer. Your home will sell, even if you have tenants. No waiting for the right buyer to come along!
The way the process works is quite simple.
- You’ll contact the cash buyer and have an intro phone call. During this call, you’ll describe your property, provide some information, and the investor may or may not give you a ballpark estimate over the phone.
- Assuming the initial conversation goes well, the investor (or a member of their team) will come out to inspect your property. This inspection is about what you would expect for a home inspection if you were buying a new property. The investor is trying to get a feel for what repairs might be necessary and the home’s overall condition.
- After that, you’ll receive a fair, all-cash offer for your rental home with tenants! Even if the place needs fixing up or it has tenants in it – that doesn’t matter. You can sell your Houston home!
Can I Sell My Houston Rental Property: Yes – Consider Cash Home Offer USA
Cash Home Offer USA is a cash buyer that is ready, willing, and able to buy your rental home.
Whether you have a year-long lease, are going month-to-month, or have tenants that haven’t paid in awhile – none of that matters. We can come out and write a fair all-cash offer for your property!
If you have a rental property that you want to sell, please contact us today!