Here are three ways to sell a property that already has a tenant in it.
With San Diego home prices at historic highs, many landlords are considering listing their investment properties for sale. However, many of them have the same dilemma: “What do I do with the active lease and my tenant?” First, a quick note for property owners: The county-wide eviction moratorium is set to expire in October this year, but a client of mine, who is a tenant eviction lawyer, believes that it could be extended further.
If you have a property you want to sell that’s occupied by a tenant, you have three main options:
1. Cash for keys. If you’re selling at a price that’s going to net you a large sum and you have a little bit of equity to spare, you might offer the tenant a cash incentive to leave and sell the property unoccupied. Many times, the buyer will live in the home themselves and pay you the largest amount of money for a home. It might make sense in certain circumstances to offer cash for keys.
2. Sell the property to an investor. In this scenario, your buyer wants to have the tenant in place. The investor will become their new landlord and be subject to the terms and conditions of the original lease. Word to the wise: When selling to an investor, there’s a good chance you may not be receiving fair market value. These buyers are looking for deals.
3. Wait until the lease runs out. This is the best option, in my opinion. When the lease runs out, you can give the tenant a notice to vacate, fix anything that needs to be fixed, prepare it, and take professional photos. This is going to go a long way in getting the highest possible dollar value for the property.
Bonus tip: Always have a real estate attorney on standby in case any disputes arise during the negotiations or sale.
If you have questions for me about this topic or anything else related to San Diego real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.