Can You Sell a House With a Tenant In It?

Can You Sell a House With a Tenant In It

You can certainly sell a house with a tenant occupying it. However, the fact that someone is renting it only adds to the challenge of selling a house.

You will have to factor in the tenant’s rights stipulated in the lease agreement, state or local authority laws, and your interest as a seller. Most state laws allow tenants to occupy the house for the remainder of their lease period.

When selling a tenanted property, there are only two ways to handle it. You can choose to be patient and wait for the lease agreement to lapse or sell it with the sitting tenant. A sitting tenant can make or break the sale of a house.

It is important to inform your tenant of the plans and compromise to ensure the sale is successful.

Let’s explore the benefits and disadvantages of each of these strategies.

Table of Contents

1st Option: Waiting for the Lease to Expire


Gives you time for improvement: Waiting for the tenant to move out of the rental property gives you the time and the opportunity to spruce up the house, clean up, and do some minor renovations before listing the property for sale to a potential buyer. Doing these simple and minor upgrades ensures the property is more attractive and increases its chances of attracting potential buyers and getting a better price.

Can reduce timing issues that affect closing: If the real estate market is prime, the house has a chance of getting an interested prospective buyer faster than you expect. Depending on your jurisdiction’s lease agreement and regulations, getting the tenant out in time might be difficult. An unoccupied house means you have the freedom to accept any offer whenever it is presented to you with no problem.


Cost of the mortgage: Mortgage is paid monthly in most cases. Therefore, you will be outsourcing funds to make the mortgage payments every month because you do not have a tenant. The months it takes to prepare your house for sale, list the property, accept a suitable offer, and close the sale, you will carry the burden of carrying costs.

Lease agreement form

2nd Option: Selling With a Tenant Occupying the House


Incorporated staging: A furnished house will attract a potential buyer since they can picture themselves living there, and the house looks homely. The situation is made better if the tenant has taken great care of the property.

It will attract potential investors: If the property already has an existing tenant, potential real estate investors who want the house for rental property purposes will be drawn to it since it will save them the hustle of looking for a new tenant.


Unhappy tenants pose a challenge to showings: A tenant who already knows they have the notice to vacate lucks the motivation of maintaining the place and keeping it attractive for showings. A problem tenant may do whatever is possible to sabotage the sales process.

Can I Sell My House With a Tenant in It?

You can sell your house with an existing tenant in it. However, you need to be aware of the tenancy agreement you entered into as well as tenant rights. There are different types of lease agreements that exist. They include the following:

Tenant With a Month-to-Month Tenancy Agreement

A month-to-month lease is the most flexible type of lease that exists. You might be required to give your tenant 30 to 60 days’ notice to vacate the premises, depending on your state. Ensure that a notice is provided (per the lease agreement) to the tenant with details regarding the completion of the agreement.

A month-to-month lease can be terminated at any time by the landlord without any cause. Therefore they are not required to inform the tenant about their intention to sell. However, to make the process of showings and minor refurbishment easy, it is advisable to let the tenant know what is happening.

Tenant on a Fixed Term Lease

A long-term or fixed term lease means the process of selling a house with a tenant will take a longer time. The only way to get around such a lease is if there is a termination clause attached to the lease.

Otherwise, the tenant has a right to occupy the property until the lease agreement is done, especially if the tenant is paying rent diligently and does not violate the lease agreement.

A current tenant following rules and paying rent on time and regularly cannot lose the right to call your house a home because you are in the process of selling the property. You have to wait for the tenancy agreement to end.

A Problem Tenant

You need to be very careful when dealing with a tenant with whom you do not see eye-to-eye. It is not advisable to organize a showing when an uncooperative tenant is around. A bad tenant might try to sabotage the process.

It is important to corporate with your tenant to make the sales process much easier. You can achieve this by offering rent breaks for their cooperation. In turn, they must ensure that they keep the house presentable for any potential buyer and give way for showings.

What If the Tenant Does Not Want to Move?

Sell to the Tenant

If the tenant is unwilling to move, you can see if they can and are willing to buy the property. If they are up to it (and their property is already there), it might be your best bet for selling the house.

If they are not in a position to access mortgage facilities, you can offer them seller financing. In this case, you are acting as both the seller and lender.

Giving the tenant to make small payments to you. Most sellers do not prefer this method, but it might be a better option than the hustle of waiting for the lease to end and selling the house.

Sell to an Investor

In most cases, homeowners looking for houses will not be patient enough to wait for the lease to end. You may have a better chance of looking for an investor, although this is also a smaller pool.

This is because any investor interested will have to comply with the lease agreement, and they cannot make any changes since it is a tenant occupied property.

Pay the Tenant to Vacate

It might sound a bit ridiculous, especially if you are selling the property to make a profit. However, if you need the tenant-owned property sold immediately, you may have to make the deal a little better.

Before making any offers, you need to look around and know the rent charged. If the majority of rents around are more than what you have been charging, you can offer to pay the difference and multiply it by the number of months remaining to the end of the lease. You can also offer to pay the relocation costs and a little cash to cover the security.

You need to treat your tenant with dignity and respect. How you deliver this devastating news matters. It is also important to deliver the news in person face-to-face. The tenant will know that you value their feelings.

By doing this, the tenant will be more inclined to assist you the best they can to make the sales process a success.

You should also remember that each state has its interpretation of such laws. Therefore it is important to familiarize yourself with the laws of that particular state to know the best way of selling your property without breaking any laws.

You also need to understand that the tenants understand the lease agreement; therefore, you must be aware of and understand the lease agreement you signed. The process will be smoother if you are aware of what you are dealing with.


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