As rent prices in Phoenix go down, more and more landlords are thinking about selling. But how does that work with tenants in place?
First things first: yes, you can put up a tenant-occupied property for sale. Arizona tenant rights allow tenants to stay in the property after the sale. Still, the fact you can opt for this approach doesn't always mean you should.
Need some help with selling your tenant-occupied property? This guide will bring you up to speed on what this process involves!
Putting up a Tenant-Occupied Property for Sale
In some cases, selling a tenant-occupied property is relatively simple. Other times, there will be a few factors you'll want to consider first.
First, take a look at the pool of potential buyers. Many investors are fine with existing tenants if they're paying rent. If the tenant's lease is set to expire soon, the property will also appeal to buyers who want to move in.
A lot of this depends on your property's market price. High-priced properties tend to get purchased by people who want to live there. If so, they may not want to take on a big mortgage while waiting for the tenant to leave.
The personal characteristics of your tenant play a role as well. A tenant who's hard to work with will hinder your selling efforts. And if they're paying below-market rent, most buyers won't want to deal with the headache.
Selling With a Tenant In Residence
Let's say you decide to sell the property with an existing tenant. If so, there are a few things you can do to make the sale go more smoothly.
For starters, make showing times easy for them. Consider their schedule when adding showing times to your rental property listings. Have your agent or property manager give the tenant 24 hours' notice before showings.
During showings, the tenant shouldn't be on the premises. Very few buyers and investors like being followed around by current residents. This is particularly true if the tenant isn't happy about the imminent move.
Finally, make it easier for the tenant to keep the property in good condition. Offer to hire a yard or cleaning service while the property is on the market. This is preferable to scheduling a rental property inspection every week.
Negotiating With the Tenant
Sometimes, having a tenant will hurt your chances of selling a property. The solution is simple enough: try to get them to leave.
If they have a long-term lease, try negotiating with them. One common approach is to offer them money in exchange for a lease amendment. If they accept, you can advertise the property as "vacant upon closing."
Keep in mind that negotiating move-outs can be risky. If the tenant stays in the property beyond closing, the new owner will have to evict them. If so, the landlord-tenant laws state that you'll likely need to pay the eviction costs.
Tenant-Occupied Properties and You
In Phoenix, putting up a tenant-occupied property for sale can be a solid strategic move. The above guide will help you with this process!
Looking for professional help with selling your rental property? At PMI Phoenix Metro, we use state-of-the-art technology to help landlords make informed decisions! Schedule a consultation with us to learn more!
