If you’re a landlord ready to sell a condominium in Massachusetts or New Hampshire but you have tenants in place, you may be worried about what action you can legally take to move forward. The good news is you have a range of options, all of which we’ll guide you through in this article.
Read on to learn everything you need to know about selling a condo with tenants in place.
Can I sell a condo with tenants in place?
The short answer is yes, but it’s important to consider all your options and any potential hurdles before you move forward. Here are a few things to consider:
Are the tenants interested in buying the property?
The first thing you should do is tell your tenants you intend to sell the property at some point in the future (you don’t need to be specific at this stage) and ask them if they’re interested in buying the property. This is often an option tenants are eager to consider, as most want to get on the property ladder and don’t want to have to go through the trouble of finding somewhere else to live.
If your tenants are interested in (and capable of) buying, you can avoid paying real estate agent fees and the entire process will be smooth. If you are more interested in being rid of the responsibilities of being a landlord than monthly payments, you can even consider owner-financing, if they’ve always met their payments on time, though make sure you think this through carefully. (Owner-financing can be a good option if the market in the area isn’t good.)
What does your lease say?
Your lease contract with your tenants will likely include guidelines for what should happen if you want to sell the property. If you’re not sure what these clauses are, review your lease to find out what you’ve agreed to. Most leases define how long the tenants have to vacate the property (usually 30 days). The housing market has been hot in recent years, so the earlier you notify them of your intentions, the better.
This is also a good time to review when the lease agreement expires – if it’s coming up in the next few months, all you need to do is notify your tenants that you intend to sell and won’t be renewing the lease. This is a good option if your current tenants are less-than-ideal and you’ll need some time to prep the property before you put it on the market.
If you’re not sure what you can legally do to move forward, perhaps because you don’t have a clause in the lease that allows you to end it early, consult with a real estate attorney before moving forward to see what they advise. Remember that tenancy laws in Massachusetts favor tenants, so make sure you know what you’re required to do before you take any action. You can learn more about MA’s Landlord and Tenant Rights here.
Do you need the tenants out or just the property sold?
If you need the tenants to leave the property to sell it, but the lease has months or years left on it, then you may need to be more creative about how you sell the property. Here are a few ideas:
- Pay the tenants: Money talks, and if you want to sell your house before the terms of the lease are up, offering to pay the tenants to leave is usually the most effective way to get them to do so without any backlash.
You can also incentivize them to keep the house clean and ready for viewings, if necessary. You may want to give them more time to move, offer to help them find a new place to live, discount their rent, pay them in cash, or give/buy them something they want/need.
- Reach out to your contacts: If you have (or can make) contact with other landlords in your area, you may be able to find someone looking to expand their real estate portfolio and will be happy to purchase the property with your current tenants in place. If they’re good tenants you can recommend because they always pay on time, it can be a win-win for all involved.
Do you like your current tenants?
Or, perhaps the more accurate question is, are your tenants “normal” people? Do they like to live in a nice space and look after their things? Can you talk to them and find them friendly and reasonable? If you’re dealing with nightmare tenants, you’ll need to tread more carefully.
If you have any concerns that your tenant will not react rationally to the news that you’re selling the property, keep your cards close to your chest until you know exactly what you’re doing.
If you like your tenants and perhaps even feel a little guilt for what you need to do, make sure you keep them in the loop and be accommodating. If you plan to put the house on the market, don’t just tell them you want to have an open house on X date, ask them when would work best for them and offer to pay for a cleaning company to come and clean the place for them.
Remember that where you live is your safe space, so feeling uncertain about your home and inviting in strangers when you aren’t there can be stressful.
How much time do you have?
Another consideration is how much time you have to make the sale. Whether there’s an external factor at play or you’re just not interested in being a landlord anymore, you may feel like offloading the property as soon as possible. In these cases, check with the tenant to see if they’re interested in buying the property, then reach out to a home buying company like us.
We buy condos in any condition without fees and offer fast closing, so if you’re looking for a fair and fast cash offer, we can help. Reach out to us today to get the ball rolling and we’ll help you sell your rented condo as soon as possible.
When it comes to selling a condo with tenants in place, it’s important to do your research on what you’re legally allowed to do and then approach your tenants from a place of compassion. You can’t guarantee they’ll react in kind, but it certainly makes an easy sale much more likely. If you want to sell a condo quickly in Massachusetts, we’re here to help. Click here to find out how to get a fast cash offer for your condo.