With low inventories across the U.S., now is a great time to sell. You may have clients interested in putting a rental property on the market that’s currently occupied by tenants. Desare Kohn-Laski, broker-owner of Skye Louis Realty in Coconut Creek, Fla., offers these three tips to successfully navigate the transaction.
Read more: Study: More Owner-Occupied Homes Becoming Rentals
1. Understand the tenants’ rights.
Tenants’ rights vary from state-to-state, but overall, if the rent has been paid on time, it’s not legal to evict a renter, says Kohn-Laski. The owner will likely need to see the lease through, especially if there is no early termination clause. If the occupant is on a month-to-month lease, the owner must provide proper notice, which in some states is as little as 30 days. It’s important to stay up on your state’s landlord-tenant laws and regulations.
2. Sell the property to another investor—or to the tenant.
“There are investors who would be very willing to be the new owner of the property,” Kohn-Laski says. However, terms of the sale must include keeping the current occupants as tenants in the property and adhering to the lease agreement, including the rental fee. You could also notify the occupant on the owners’ intent to sell and offer them the opportunity to purchase the property.
3. Offer the tenant a move-out payment.
If your client is desperate to sell, a move-out settlement might be the best choice. “For this option, knowing the average rent in your area can help you determine how much you’re going to pay your tenant to vacate the space,” Kohn-Laski says. Multiply the average monthly rent and the number of months remaining on the lease. Throw in a moving stipend or offer to pay for the security deposit at the new space as well, she suggests, to sweeten the deal.
However, if a tenant becomes uncooperative and does something like change the locks to prevent the owner from accessing the property, it’s time to seek help from an attorney and possibly the police, says Kohn-Laski.
Source: Skye Louis
