Selling rental property for sale by owner can sometimes be a bit more challenging than selling your own residential home. Listing a rental property was something I often dreaded when I was a Realtor. Before proceeding, I first wanted to meet and talk to the tenants.
Even after that "meet and greet," my anxiety was at a very high level. The tenants might be all sweet and lovable when I first met them and then turn into ogres later.
Let's give those charming tenants a break first before proceeding OK?
You decide you want to sell YOUR house, so it's none of the tenant's concern anyway. Right? Hmm.
Bob and Mary have been living in their lovely rental home for perhaps 4 years.
They feel it's their home and have even painted, planted, decorated, mowed, raked leaves, hung expensive custom draperies and curtains. I can hear some of you rental property owners saying; "What dream world are you living in Doug?" Yep, owning and maintaining rental properties can be trying at times.
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They've had parties and barbecues. Their youngest daughter Amy was born during the time they lived there and they loved the way they fixed up the children's bedrooms.
Then it happens. Out of the blue, you announce to Bob and Mary, "We are going to retire and are in the process of selling rental property for sale by owner that we own."
BAM! Never seen that one coming!
Yes, it can hurt when you tell your long time tenants they may have to move.
What happens when you get an offer that states the tenants are to be out by closing day?
I'm of course talking about single family dwellings or a duplex here, not apartment buildings.
What Can You Do?
First, I would suggest that you don't just leave a note in the mailbox when you are selling a
rental property for sale by owner. Go talk to the tenant in person.
Explain your situation and ask if there is anything you can do, to make their move less
Explain about what notices they will receive before showings
In other words, show some compassion and understanding.
Rules, Rules, Rules
When you are selling rental property for sale by owner or through a Realtor®, there are certain rules that must be followed. I can only give you some examples, as these rules will vary, depending where the property is located. So, here are some examples.
The Good, The Bad and The Just Plain Nasty
Selling Rental Property For Sale by Owner
In my real estate career I have seen all of the following when selling rental property:
The Good: On occasion, there are tenants that are just wonderful. They allow you to show the house on short notice.
They leave when a potential buyer is expected to view the property. They may even make sure the place is clean, neat and inviting when there is a showing.
If you have such a tenant, count your blessings! Make sure you do something special for them when the property sells. I mean that. You are truly blessed.
The Bad: These tenants insist on their rights. You better give them that 24 hour's written notice and don't show up 5 minutes early!
They are surely not going to clean the house before a showing and heaven forbid that they go outside for a walk while people are viewing the property.
They also may sit in front of the blaring TV or cook cabbage soup during the showing.
The Just Plain Nasty: Oh Boy! These are real fun tenants when it comes to selling a rental property for sale by owner. These people not only do the above, they take things to the next level. Here are some things I've experienced:
NOTE: As a for sale by owner, you have a big advantage selling rental property. You will still have a key to get in the house. Realtor's can't put a lock box on the property without permission of the tenants or give out keys.
Yep, things can get pretty interesting when selling a rental property for sale by owner!
What Can I Do?
Here are a list of ideas, should you be selling rental property for sale by owner.
Give the tenants notice and sell the property after they have left. You may have to offer an incentive if you want them out early.
If you have super nice cooperating tenants, you may be able to pull everything off with the tenants still there. Don't forget to reward them, please!
Hmmm? Nope, that's about it.
One More Real Important Detail
When Selling Rental Property For Sale by Owner
Don't forget to ask the present tenant if they wish to buy the property from you. You might even offer them a discounted price. Why?
Yep, I think you could offer a bit off the price for those nice tenants. A little carrot on the end of a stick, shall we say? You get the picture.
If you need contract forms for the offer, I have provided a link below to obtain proper forms for various countries.
You should always have blank contracts on hand regardless when selling for sale by owner. Don't get caught off guard!
You can find out where to get these forms from; Contract Forms
While I'm at it, don't forget to advertise when selling rental property for sale by owner online. You can find my recommendations of For Sale by Owner Websites
Don't Forget the Taxes
where you live when selling rental property for sale by owner, there is more than likely
some tax implications, before and after you sell. I have added the
following links for the U.S.A. and Canada for your convenience.
Proceed to these Photo Links