With rents soaring at a double-digit pace, it's a great time to be a landlord in Florida.
But maybe you've been looking at your numbers and have decided you'd rather take advantage of current home prices rather than the rising rents. Selling a rental property isn't that much different from selling any other house, but if you have tenants currently living there, you do have some additional factors to take into account.
Let's take a look at what's involved in selling a rental property with tenants in Florida.
Know Your Lease and The Law
Landlords have three options for selling investment property with tenants:
- Wait out the lease
- Pay tenants to leave
- Sell with tenants in place
Waiting out the lease might not work with your schedule since you have to provide 60-days notice before the lease ends to remove tenants with a lease agreement. For month-to-month tenants, it's a simple process to have tenants out of the house with a 15-day notice and a lease termination letter.
With a formal lease agreement, it's a good idea to have a section in there detailing what happens if you decide to sell the house before the lease ends. You don't have to go through an eviction process, and the tenant will have already agreed to cooperate with showing the house to sell.
You want to communicate well with your tenant, providing a letter informing them of your intent to sell. This should clarify your expectations for them and include the following:
- Selling specifics such as when you plan to put the house on the market
- Their responsibilities related to property maintenance
- Showing notice (legally at least 12 hours) and how they will be notified
- Expectations for house's condition for showings
Be upfront with your tenants about selling and available to answer questions. You might also offer them the chance to buy the property before you list.
Market the Property
There are pros and cons to selling with tenants, and they mostly impact how you market the property. On the one hand, a ready-made cash flow is highly appealing to landlord investors, and an occupied home is already staged for potential buyers.
On the con side, the tenants can limit your pool of buyers to only investors as homeowners might be concerned about how well tenants maintained the house. The property might sell for a little less as well since your ability to do any improvements is limited.
If your market is other investors, be prepared to answer questions about the current lease and the quality of your tenant. You're marketing your tenant as a good bet along with the house. Provide details on the current rent amount to help them determine their own ROI.
Interested in Selling a Rental Property?
If you keep your tenants when you sell a rental home, keep them informed of the process and the expectations. Other rental property investors are your likely target market, so provide information about your tenant, rent amount, and the lease to help them make a decision. Keeping your tenants in place means continued cash flow until the sale, but it can impact the sale price.
Thinking of selling a rental property that's become too much to deal with? Check out our rent-sell calculator to see if it's the right time to sell or contact us to discuss our management services.