Selling a Rental with Nightmare Tenants

Investing in real estate can help bring in some big returns and is a great way to increase your wealth. Renting the property out while it builds equity is a great way to generate some extra monthly income while your investment appreciates in value.

But like any good investment, there is a ton of risk involved. One of those risks is that you could end up with nightmare tenants. While most tenants are great people, the bad ones give all renters a lousy reputation. Not paying rent on time, throwing loud parties, and living in filth are some of the most common complaints landlords have about their bad tenants. A bad tenant can be exhausting and expensive, potentially costing you thousands of dollars in damages and missed rent payments. If you’re one of the unfortunate landlords who is stuck with bad tenants, you may be looking for a way out. 

Sell rental property with problem tenants

Since home values have increased substantially in the last few years, it could be a good time to consider cashing out on your investment by selling. But, what should you do if you want to sell your investment property while horrible tenants are renting it out?

Let’s take a look.  

Selling While Still Locked Into A Lease

Did you know you are able to sell your investment property while a tenant occupies it? You can! However, there are some things you should consider. 

If your tenant has a month-to-month lease agreement, you can simply end the contract by giving the tenant notice to vacate as required by state law. In many states, it is only 30 days, which means you will be able to get out from under this bad situation very quickly. If your tenant has a longer length of time left on your lease, you still have options, but they are a bit more complex. Here are some ideas for you:

  • Wait until the lease expires – The easiest method, at least from a legal sense, is to wait until the lease expires and your tenant has to move out. Yes, you will have to put up with their shenanigans and hope they don’t cause too much damage, but waiting until they move out will make the home selling process easier and help you earn more money. 
  • Evict the tenant – If your tenant violated any lease terms, you could terminate the lease with proper notice, as noted in your lease agreement. Some of the most common lease violations that lead to eviction are:
    • Not paying rent
    • Violating a no-pet clause
    • Causing severe property damage
    • Falsifying information on the rental application

It is important to note that due to the eviction moratorium, which is part of the CARES Act, landlords may not be able to evict a tenant due to nonpayment of rent. There are currently ten million tenants nationwide who are late on their rent payments. That adds up to 20% of all renters! You could receive huge fines if you evict a tenant who should be exempt as part of this emergency order, so be careful to read through the tenant’s rights and possibly consult an attorney.  

  • Sell To Another Investor – There are tons of aspiring and experienced investors out there who will gladly take your property off your hands. You will need to provide them with a copy of the lease agreement beforehand and let them know that the tenants aren’t your favorite people, but if they’re up for the challenge, it could be a win-win.

Selling To Another Investor

If you decide to go the route of selling to another investor, you will have to disclose the characteristics of your current tenant. That means if they are clean, always pay on time and take of the home as if it were their own, more investors will want to purchase the home, and you could be picky with who you sell it to. However, if they are messy, rude, or difficult to work with, you will have to let the potential buyers know that in advance. The tenants become part of the home sale, and undesirable ones hurt your home’s value.  

While selling the home, the investor will still have the chance to conduct an inspection and appraisal if they are financing their purchase. You will need to give your tenant 48 hours’ notice before anyone enters the property and hope that they are willing to cooperate. 

What’s The Best Option?

The “best option” is different for everyone. If you just want out of this situation because it is causing you stress and anxiety, sell the home to anyone who will buy it. But, if you are looking to maximize your return, it would be best to hold off on selling. If you can swing it, waiting until the tenant moves out and you are able to get the house cleaned up and looking great would be ideal. This way, you won’t have to worry about potential buyers having to schedule showings with your nightmare tenants. Relying on the tenants in any way will take the house will probably take longer to sell, and when it finally does, it may be for less than you’d like.  

If you wait until the tenants move out, it will essentially raise the value of the property. You’ll be able to make any repairs or improvements that will make the home more desirable to buyers, and you’ll have the ability to prep and stage the home to maximize its appeal.  

Homes are currently selling quickly in most markets, so if you are able to get the house cleaned up and ready to show as soon as the tenants leave, you should be able to get to the closing table in as quickly as 45-60 days. 

Need Another Option?

Let’s say that your tenant still has a year or longer on their lease, and you want out of this obligation now. First, we don’t blame you. Being a landlord on your own can be incredibly stressful. If you just want out and don’t want to go through the trouble of trying to sell your property while dealing with bad tenants, we can help. 

We buy houses with tenant problems. We can make you an offer and close in as little as seven days. We won’t ask you to make repairs, you won’t owe a commission, and best of all, we will deal with your tenants.  

If this is an option you would like to consider, give us a call or fill out some information on our website. We will get you an offer in 24 hours for to consider. There is no rush, but we are able to close quickly. Imagine, a week from today, you would have money in the bank instead of a headache from a tenant.   Whatever you decide, we wish you the best of luck. Don’t let one bad tenant discourage you. Real estate investment is a great strategy and can have huge benefits.

Ryan Garrison

I have been purchasing properties in Western Washington since 2003. My wife is from Olympia originally. We have three beautiful kiddos and a dog \"Lucky\". I enjoy helping my clients solve problems related to unwanted properties. I am also a Licensed Real Estate agent in the state of Washington.

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