Investing in Star single-family rental homes may begin with buying properties, but it’s important to keep your end game in mind. Sooner or later, you will realize that you want or need to sell your rental homes, and probably some of them may still be occupied. Selling rental property with existing tenants can be a complicated issue. You will get several responses from your renters after hearing the news, and you probably may not be able to forecast their reactions. However, if you discuss the subject with your tenants professionally, you can easily lessen their worries and also get them on board with the selling process.
Getting prepared to talk with your tenant about selling a rental house requires some meticulous planning. It is also important to do a little research into local laws as well. Landlord laws can vary widely from place to place and may place restrictions on property owners looking to sell an occupied rental home. Before you raise the subject of selling with your tenant, make sure that you understand the laws in your area and that your next steps do not violate the law or your tenant’s rights. It is also essential to think about your tenant and what you know about them. This can help you to plan out how and what you say to them more carefully.
Once you have a good idea of how you want to approach your tenant, it is more helpful to discuss your plans with them in person. While you can and should notify your tenants about the property’s new status in writing, things will likely go much better if the first time they hear about it is from you directly. As needed, consider setting up an in-person meeting or video conference with your tenant. Explain your plans to sell the house, and then give them time to ask questions.
You may want to try and anticipate their questions ahead of time so that you have your answers ready. Your tenants will probably ask you whether they will be forced to move when the property sells, even if their lease hasn’t expired. And also, they may want to know who will be buying the house, even though you may not know that at first. If you are selling to another investor, try to share as much as you know about the new owner’s plans, including whether the new owner will assume the current lease or require new terms. If you don’t already have a buyer, don’t hesitate to ask your tenants if they are interested in buying the property themselves. They may want to stay in the home so much that they are willing to buy the property from you directly.
Conversations about selling your rental house can be very emotional for your tenants. Basically, selling the home they live in likely means major changes for them. They maybe feel resentful or betrayed. These are sentimental responses that must be resolved. If your tenant does become emotional or upset, do your best to stay calm.
Aside from comforting them, try to offer them as much time as you can to adjust to the news of the impending sale. Providing clear details regarding the expected time frame can help give your tenant a sense of how the next few months will continue and help them to start making any necessary plans. At that moment, when the project starts to move forward, be sure to send regular updates about the sale and notices if you need to enter the property with a potential buyer.
If you correctly treat the issue and maintain open lines of communication, your tenant may not only accept your plans to sell; they may even be willing to participate in the process. By knowing what to do and how to protect them, your tenant could help make the selling process a smooth and efficient one. Yet, no matter how they react with the situation, it is necessary to respect your tenant’s privacy and to obtain their permission before showing the house.
Are you feeling a little overwhelmed with all the tasks and responsibilities of property management? See what Real Property Management Boise can do for you! Give us a call at 208-494-1800 or contact us online today.
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