Selling a property is always a big decision, but it can become more complicated when the property is occupied by a tenant. Whether you’re a landlord looking to offload a rental property or you’re selling for other reasons, it’s important to understand how to navigate the sale while still respecting the tenant’s rights.
The Legal Provision for Showing the Property
In Texas, many landlords use the standard Texas Association of Realtors (TAR) residential lease, which includes a provision allowing the landlord to place a key box on the property and show it to potential buyers. This means that even if a tenant is occupying the property, the landlord has the right to market and sell the home.
However, it’s essential to balance this legal right with practical considerations. While landlords can show the property, tenants are still living there, and showings can be inconvenient for them.
Gaining Cooperation from the Tenant
The first step in selling an occupied property is to communicate with the tenant. If the tenant is cooperative, it can make the process significantly easier. Let the tenant know that the property will be shown to prospective buyers and try to schedule showings at convenient times. A cooperative tenant will often keep the property clean and presentable for showings, making it easier to sell.
Unfortunately, not all tenants are easy to work with. Some tenants may be less accommodating or may not maintain the property in show-ready condition. In these cases, it may be challenging to present the home in its best light to potential buyers.
Selling to Investors vs. Primary Occupants
If you’re selling the property to a real estate investor or an investment group, they are typically more understanding about seeing a property with a tenant in place. Investors are accustomed to evaluating properties that are occupied and may even prefer to purchase a property that is already generating rental income. This type of buyer is usually less concerned about clutter or the tenant’s personal belongings.
However, if you’re selling to a buyer who plans to live in the property, the process can be trickier. Prospective homeowners often find it difficult to visualize themselves living in a home that is currently occupied by someone else, especially if the tenant’s belongings or property conditions make the home less appealing. In these cases, it might be beneficial to consider waiting until the lease ends to show and sell the home.
Conclusion
Selling a property with a tenant in place can be a complex process, but it’s not impossible. By understanding the legal provisions in the lease and working with the tenant to ensure the property is presentable, landlords can successfully market and sell their property. Whether you’re selling to an investor or a primary occupant, having a clear plan and good communication with the tenant is key.