How to Sell Your Tenant Occupied Rental Property (And Still Have a Happy Tenant!)

While rental properties are a great investment, sometimes it’s the right time to sell. And, selling a tenant occupied property can add an extra challenge! There’s a few things I learned from my parents, my rental property gurus, and my amazing realtor, that made the process oh-so-much easier for both me and my tenants. I’ll share all those below, as well as one passed along from my Instagram family!

This Isn’t an Easy Undertaking

Selling a tenant-occupied rental property isn’t easy. Believe me–I’ve been there. I sold my condo a few years ago towards the end of my tenants’ lease. Having to arrange repairs, showings, open houses, inspections, appraisals, walkthroughs around your tenants’ schedule can be a huge hassle.

I ended up taking 2 days off of work to get the painting and small upgrades done before the open house. And, we scheduled the listing go-live for a weekend the tenants were planning on being out of town, so we didn’t have to kick them out of their home for the first showings and open house.

Should I Just Wait to List?

A lot of realtors will recommend you wait until your lease is up to sell your property. And, sometimes that is definitely the right decision. If you have a lot of work that needs to be done on the property before listing, you may be better off waiting for the tenant to move out, then getting all that work done before listing the property.

But, other times, you might need to move more quickly. Maybe the market is super hot, or the inventory is super low. Or, maybe you can afford to let the place sit vacant for several months, waiting for the sale.

For me, there were no condos on the market in my price range and my neighborhood when I talked to my real estate agent about listing, so she recommended not waiting until the lease was up in April and instead moving quickly and putting the condo on the MLS in February.

Just to be clear: I’m not talking about selling your investment property in the middle of the lease. My tenants’ lease ended 3/31 and I closed on the sale on 4/2. I have zero experience on handing leases off to a buyer, so definitely ask your other real estate experts, if that’s your situation.

Don’t Forget Your First Obligation

Your first duty is to your tenants. You entered a binding agreement with them that you would provide them housing.

Yes, there should be a clause in your lease that allows you to market the property for lease or sale, that you can have showings with 24 hours notice, and that the property should be kept in “reasonable” condition.

But, that doesn’t mean they have to bend over backwards to accommodate last minute showing requests, or keep their place spotless for weeks while having the place on the market.

Imagine being in their shoes. Someone is now asking you to keep your home clean at all times and asking you to leave with little notice every night of the week, and you’re getting nothing out of the deal. There’s very little incentive for them to be nice about this process, so make it as easy for them as possible.

Ok, let’s dive into it!

My Tips for Selling a Tenant Occupied Property

Prep the Tenant as Far in Advance as Possible

Let your tenants know as soon as you sign your contract with your realtor. And, make sure to give them as much notice on showings and the open house as possible. Work with them if you can to accommodate their schedule, so they’re not being kicked out of their home every night 10 minutes after they get home from work.

As soon as my tenant gave me her notice, I let her know we were going to put it on the market. We promised her 24 hour advance notice for showings during the weekends or evenings (and noted that in the MLS), and luckily besides 2 surprise showings, we were able to accommodate that. 

Price to Sell

Price your place aggressively to minimize the time spent on the market. If you’re selling an investment property, I have to assume the number one reason is money (whether you’re trying to limit your costs or trying to recoup some cash from your investment).

Don’t price your place for more than it’s worth, or it’ll end up sitting on the market for a while. Then you’re dealing with unhappy tenants who have weeks of showings AND a potentially vacant property when their lease is up.

We priced ours about $5k less than what we thought we could get for it. And, we ended up with 3 offers (1 full price) in the first 2 days on the market. For us, a quick turn around on the sale was more important than a little bit of extra money and the potential for a vacant property.

Try to Work Around Their Schedule 

Try to work on your tenants’ schedules for open houses, showings, and inspections if at all possible.

If you know they work business hours, schedule as much as you can for the times they’re out of the house. And, try to group showings if possible, so they only have to leave for one chunk of time vs several times in 1 day. 

Hire a Cleaning Company (Tip From My IG Family)

If you’re worried about your tenants keeping the place clean when selling a tenant occupied property, hire a weekly cleaning service, at your cost. You can sell it as a “thank you” to your tenants for their flexibility, while easing a lot of your worries about the cleanliness of the property for showings.

Make It Worth Their While

Give your tenants a discount on their rent, or a gift card to a local restaurant as a “thank you” for accommodating your requests. It doesn’t change that they have to keep the home clean or accommodate lots of intruders, but it does make it a little less annoying.

I gave my tenants the option of $250 off their last month’s rent or a $250 gift card to Target to make up for the inconvenience of listing the rental property while they still lived there. They were super grateful, and I definitely think it made a difference for them when they had to work their schedule around showings.

Bottom Line: Would I Do It Again?

100%! Working around my tenants’ schedule, taking a few days off work to get the place ready, and giving them a discount on the last month’s rent was more than worth it for me.

We were able to sell our condo quickly, with multiple offers, since we were one of the only places on the market in our price point and neighborhood.

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