rental tenant files for bankruptcy

What to Do if a Tenant Files for Bankruptcy

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One of the biggest issues a landlord can face is a non-paying tenant. When that happens, if the tenant does not leave voluntarily or by request, you start the tedious eviction process. But what if the tenant files for bankruptcy? Then the situation becomes more complicated.

What Happens When a Tenant Files for Bankruptcy?

Any rent incurred before the tenant filed for bankruptcy might be up for review as unsecured claims. You can discuss the issue with the tenant’s bankruptcy trustee.

There are four types of bankruptcy, but the two most common that tenants file for are Chapter 7 and Chapter 13.

  • Chapter 7 bankruptcy: also known as straight bankruptcy, is for anyone with a lot of unsecured debt (e.g., credit cards, medical bills, personal loans, etc.), and the debt is dismissed.

 

  • Chapter 13 bankruptcy: also known as reorganization, is for anyone who faces short-term financial setbacks, like the loss of a job, long-term illness, or unexpected expenses, and reorganizes their debt into a payment plan.

Either type, when filed, results in the court granting the tenant an automatic stay. This statutory injunction prevents you from evicting the tenant.

How Do You Respond to Tenants Filing Bankruptcy?

If you think your tenant is going to file for bankruptcy, you best start the eviction process before they file. Seeing as how no one is clairvoyant, however, there are measures you can take when bankruptcy is filed:

  • Know the Exceptions: There are always exceptions to a mandate. You can still evict the tenant for other reasons than they refuse to pay. Reasons include damage to the property, criminal activity, or health ordinance violations. Confirm exceptions with a court authority or the tenant’s bankruptcy trustee.

 

  • Talk (Often) with the Tenant’s Bankruptcy Trustee: This individual is responsible for the tenant’s financial affairs and distributes assets to creditors. You are owed rent, but as to when you get paid, you’ll have to take that up with the trustee. At least they can keep you in the loop and explain proceedings and your options.

 

  • Sell the Property and Start Over: This option seems a bit extreme, but perhaps there are other reasons to sell: the property is old and outdated, in constant need of repair, has costly maintenance and utilities, and high property taxes. It may be time to start over somewhere else. You can sell the property and use the proceeds to buy a new rental in a better location.

Sell to a Real Estate Investor

Traditional buyers do not want to buy a rental with non-paying tenants. Consider then selling it to a real estate investor. Most investors will offer cash for a property “as-is,” be it damaged, vacant, or have bad tenants still living there.

Investors do not require traditional sale warranties or inspections. They pay all closing costs and additional sale fees, and you pick the closing date. Depending on paperwork and other issues (e.g., liens or taxes due), the sale can close in 30 days or less.

You can enjoy a quick closing, offload a problem rental, and start over with a better rental, using the profit from sale.

How to Sell a Rental Without Evictions

How to Sell a Rental Without Evictions

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Landlords are looking for a way out amid the federal eviction moratorium. Unpaid rent is mounting, and anyone with a mortgage on their rental property fears foreclosure.

Federal and state authorities continue to impose moratoriums on evictions out of concern for the spread of the new delta variant. But what does this mean for landlords?

What Does the Extension Mean for Real Estate?

The moratorium temporarily stops you from evicting your non-paying tenants. This extension will last till October 3rd. These halts started at the beginning of the pandemic and now millions of people owe billions of dollars in back rent.

Landlords can file for COVID Emergency Rental Assistance, but the $47 billion (so far) owed in federal rental assistance has been slow to pay out.

The number one reason for becoming a landlord is to earn a passive income. Rent payments help cover the mortgage, taxes, maintenance, utilities, and repairs on your rental. But no money means impending debt and foreclosure. The majority of landlords, big and small, therefore are selling their properties.

What Are Your Options?

Hold onto Your Properties

If you own your properties and are financially stable enough to afford their upkeep without rent payments, by all means hold onto them. You are in a better situation than most landlords.

Hopefully, you are not paying a double mortgage on the rental and your primary residence. If you fail to make payments on either property, foreclosure is almost certain.

Know the Exceptions

The moratorium provides exceptions to evicting your tenants. These exceptions include:

  • Criminal activity
  • Property damage
  • Health ordinance violations
  • Threatening the health and safety of other residents (does not include COVID-19)
  • Breaking of other lease provisions

You may want to check with a lawyer or court authority to confirm moratorium exceptions.

Sell Your Rental

Typically, if you were to sell a rental, you’d wait till the tenant lease is up or transfer the lease agreement to the new owner. However, if you own a rental with non-paying tenants, damages, or liens, no traditional buyer will be interested.

Your best option, then, is to sell to a real estate investor. Most investors pay cash for a rental “as-is,” be it damaged, vacant, or have bad tenants still living there. An agreement can often be struck between you and the investor to settle liens with the cash proceeds, or the investor will shoulder the responsibility of paying them.

Investors do not require mortgage approval, traditional sale warranties or inspections. They also pay all closing costs and associated sale fees. The best part is you pick the closing date, which can be in several months, 30 days or less.

You can enjoy a quick closing, offload your problem rental, and maybe start over with a new rental in a better location, once the moratorium is removed.

Remote Landlord: What to Do with Your Rental if You’re Moving

Becoming a Remote Landlord: What to Do with Your Rental if You’re Moving

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Are you a landlord about to move to another city or state? Will you be leaving your rentals behind? Managing remote properties is not impossible, but there are some things to consider.

What Can You Do with Your Rental?

There are two options available to you:

1. Hold onto Those Properties

Whether you are relocating, or you inherited a rental in another state, you can manage your rentals from afar. Some difficulties will present that need to be addressed. For example, regular maintenance and repairs: your tenants can notify you of issues, but you cannot be hands-on anymore.

Another issue is collecting payments from tenants who are late and carrying out evictions. Also screening new tenants, managing lease agreements, and protesting property taxes – these are all responsibilities better handled in person, or by someone you trust to act in your best interests.

Remote landlords often hire a property manager to manage the rentals in their place. They handle property showings and inspections, maintenance issues and repairs. They also keep you in the loop and carry out your decisions.

If you hire a manager, you’ll have to pay them out of your rental profits.

2. Sell Your Rental Properties

Landlords who move often sell their rentals because the long-distance work is too much stress. They then use the sale proceeds to buy new rentals wherever it is they are moving to. You can sell to your tenant, another landlord, or a real estate investor.

Things to Consider if Selling

If you’re thinking about selling to your tenant or another landlord, there are some things to consider. First, when are you moving? Are you moving in a few months, or a few days?

A traditional sale takes time. Traditional buyers need to get mortgage approval, and lenders require warranties and house inspections. The sale is further delayed if the buyer or lender wants you to make repairs.

Sometimes a landlord buyer will not close till bad tenants are evicted, and evictions take time and money. Even if the lease is up, and you get your tenants out, you still have to clean and repair the property after them.

Do you have the time to jump through these hoops? It’ll be more difficult to manage a sale long distance if you do not settle it before you move.

Instead, Sell to a Real Estate Investor

Most investors offer cash for rental properties “as-is,” no repairs or renovations necessary. They will take on the rental with its tenants still living there, whether they are non-paying or filed for bankruptcy.

Investors do not require warranties or inspections, and will close on a date of your choosing, be it in 30 days or less. You can enjoy a quick closing with less paperwork and hassle, and use the profit to buy a new rental in your new market.

capital gains tax for rental property

How to Avoid Capital Gains Tax When Selling a Rental Property

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Selling a rental is not the same as selling a primary residence because the IRS sees it as a business investment. When you sell a rental property, the profit (or gain) is reported as a taxable sale. Here’s what you need to know about capital gains and how to avoid them.

How to Calculate Capital Gains Tax?

There are two kinds of capital taxes, depending on how long you held the rental in your portfolio. The income from the sale is taxed based on a long-term or short-term capital gains rate. What does that mean? 

  • A short-term rate applies if you held onto the property for less than a year. If that is the case, the tax rate is the same as your normal income tax rate. The maximum you can pay is 37%.

 

  • The long-term rate applies if you held onto the property for more than a year. These tax rates are 0%, 15%, or 20%, applied according to income and filing status.

Avoid (or Lessen) Capital Gains Tax on a Rental Property

While there is no guarantee you will not pay any capital gains tax, you may be able to lessen its impact on your profit.

1031 Exchange

With a 1031 deferred exchange, also known as a 1031 like-kind exchange, you can defer capital gains tax if you invest the proceeds in a new property or portfolio of equal or higher value. Special rules apply:

  • You cannot use the proceeds from the sale of a rental property to buy a primary residence or vacation house. The new property must be used for rental income.

 

  • You have 45 days from the sale to find a new property, and you must close within 180 days. Check the due date for your tax return to make sure it is not due sooner.

 

  • Any cash left over after the purchase of the new property is taxable.

The 1031 exchange can be a complex process. A CPA or company that has experience with these transactions can help ensure that you meet the requirements of the 1031 tax code.

Live in the Rental to Turn It into a Primary Residence

There are different tax requirements for the sale of a principal residence. The first $250,000 earned is excluded from taxable income, as long as the seller lived in the residence for at least 2 of the 5 years of ownership.

Section 121 of the Internal Revenue Code allows you to reduce the capital gains by:

  • Making the second house the primary residence for 2 years before selling.

 

  • The 2 years of residence can occur anytime during the 5 years of ownership, prior to selling. Those 2 years do not have to be consecutive.

 

  • If the property was part of a previous 1031 exchange, you must hold it for a minimum of 5 years to be eligible for the gain exclusion.

However, turning your rental into a residence may not help reduce the tax bill if you substantially depreciated your property or owned it mostly as a rental, since you can only prorate the capital gains exclusion based on years of qualified (residential) use.

Offset Gains with Capital Losses

Let’s say you sell your rental property for more than you paid for it, but your portfolio takes a hit. You can offset your loss with the capital gained from the property sale.

You can also deduct normal business operating expenses and non-cash depreciation expenses to minimize the amount of taxable income.

The key is to deduct as much as possible to offset the gain so it breaks even or as close as possible. Ask your CPA for more details on this option to make sure you can take advantage of it.

Choose an Installment Sale

An installment sale, also known as seller financing, is a great way to reduce taxes by spreading out the payments over a longer period of time. 

It makes it easier to offset gains, since it results in a lower tax than the tax on a lump-sum gain. Usually, installment sales are structured, and how long you hold onto the property will determine how it’s taxed: long-term or short-term.

For further details on the advantages and disadvantages of an installment sale, read our article on Lump-Sum Sale vs. Seller Financing.

What Happens If I Sell to an Investor?

Selling to an investor has its benefits, most of which do not come by selling to a traditional buyer:

  • Sell the property “as-is” – damaged, neglected, vacant, or with bad tenants.
  • No appraisal, inspection, or other contingencies attached.
  • You choose the closing date, in several months, 15 days or less.
  • Decide if you want cash or an installment sale!

You may have specific questions about selling your rental property to an investor, and we have the answers. We can also match you with investors in your area who are ready to buy your property, no matter its condition or situation.

key to house how to sell rental property

How to Sell a Rental Property

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Selling a rental property has more challenges than selling a primary residence. Often, it is easier and more profitable not to sell it the traditional way. Here are the steps to selling your rental property, even if it is occupied with tenants.

Step 1: What to Do with Your Tenants

Review the lease. Is it a month-to-month lease? If so, give your tenants notice to vacate and when they need to move out. If they and their belongings are not gone by the scheduled date, you can start the eviction process, or opt to sell with tenants.

If the lease is for a fixed term, check for an early termination clause. Early termination means you, the landlord, can break the lease if you need to sell the property. If no such clause is in the lease, your options are limited. You can either:

  • Wait for the lease to expire;
  • Pay your tenants to vacate; or
  • Sell with an active lease

Only investors will purchase occupied rental properties.

Step 2: Evaluate Repairs

Whether your tenants stay or go, a rental property has to be up to par with health codes and regulations. It is your job, as the landlord, to perform regular maintenance and make repairs.

Evaluate the property and assess its damages, if any. Schedule time to make repairs when your tenants are not home. If your reason to sell is because there is property damage, you can sell to an investor who intentionally seeks out properties that need TLC.

Step 3: Clean!

You are going to have walkthroughs with potential buyers. Remember to give notice to your tenants prior to every showing. Ask them to clear clutter and not be present at the scheduled time.

Bad tenants are less inclined to follow your requests, so you may have to pay for professional cleaning and landscaping services.

Step 4: Hire a Realtor

Being a landlord is hard work. If you do not want to sell FSBO, you can hire a real estate agent to manage the sale for you. They will list the property, schedule walkthroughs, and help with sale negotiations.

A few things to keep in mind though:

  • Agents / realtors receive a commission of 3% to 6% of the sale price upon closing.
  • If your rental has damage, and you plan to sell AS-IS, your property is less likely to sell to a regular homebuyer and more likely to be of interest to investors.
  • Tenant-occupied properties will only be purchased by investors.

When your most potential buyer is an investor, you will profit by selling directly to the investor instead of bothering to list the property.

Step 5: To List or Not to List

Identifying your ideal buyer is perhaps one of, if not the, most important step in this entire process. It will save you time and stress, and even prevent you from losing money to identify the target buyer. How do you choose?

You should list your rental if:

  • It is vacant;
  • In great condition; or
  • Needs only minor repairs or quick fixes, which you plan on having done.

You can sell directly to an investor if:

  • The rental is tenant-occupied. You’ll need to disclose if they are non-paying tenants.
  • The property is outdated or needs major repairs.
  • You already tried listing it but it didn’t sell. Failed listings often get the “something must be wrong” label after 30 to 45 days on the market, and consequently sell for less than the asking price.

Step 6: Conduct Walkthroughs

If you are trying to sell, and the lease is expiring, but the tenants still live at the property, ask them about their schedule. Just like with regular listings, and the owners are asked to not be present, ideally your tenants will not be present during showings. However, if you decide to sell to an investor, meeting the tenants may be beneficial, since an investor is the only type of buyer who will purchase a rental with tenants. Keep the parties separate though if you suspect there is a risk of bad impressions.

Step 7: Pay Capital Gains Tax

When you sell an investment property, you pay tax on depreciation recapture and capital gains taxes. The amount you are expected to pay depends on multiple factors:

  • The total depreciation expense claimed;
  • Your tax bracket;
  • If you plan to buy a replacement property within 180 days of selling your rental; and
  • If you sell to receive a lump sum or installments (via seller financing).

We work with investors who specialize in purchasing rental properties, and you can discuss options with them. Even so, we recommend you also speak with a tax advisor to find out possible deductions and do the math to break even or maybe get a refund.

Final Thoughts

There are numerous reasons to sell a rental property. High equity, high demand, an increase in value, and the house being in good condition all make it favorable to place it on the market.

Other times the best option is to sell to an investor directly, so you can avoid costly fees and repairs. If your rental is occupied with good or bad tenants, your best, if not your only, option is to sell to a real estate investor.

Our investors offer to pay cash, as a lump sum or installment payments, to purchase the property “as-is.” There’s no need for an appraisal or inspection. Plus, you choose the closing date, in several months, 15 days or less, giving you time to handle last-minute items.

wad of cash seller financing versus lump-sum payment

Lump-Sum Sale vs. Seller Financing

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Seller financing (or owner financing) is an option to consider if you’re a landlord with rental property. It means the seller finances the purchase for the buyer. Rather than give them a loan, you extend a line of credit to cover the purchase price, minus the down payment. The buyer, then, makes installment payments.

There are three types of seller financing:

  • Free and Clear: The seller owes nothing on the property and sells it for monthly payments.

 

  • Wrap-up: The buyer procures the title but takes the property subject to the current home loan, which stays in the seller’s name. So the buyer makes monthly payments on the seller’s existing mortgage.

 

  • Contract for Deed: The seller holds onto the title till the purchase balance is paid off, similar to a rent-to-own agreement.

Seller-financing deals tend to be short-term. Whichever type of seller financing you choose, there are two key steps you need to take before agreeing to anything:

  1. Run a credit check on the buyer to discover their debt and payment history.
  2. Draw up a promissory note, stating the interest rate, payment schedule, and consequences of buyer default.

With only two parties involved, minus a bank and its strict lending requirements, seller financing is a quick, profitable way to sell your rental property. Let’s take a look at the advantages and disadvantages of seller financing.

Advantages of Seller Financing

  • Can sell “as-is”: No costly repairs, renovations, or maintenance are necessary. You can sell the property in its current condition “as-is.”

 

  • Higher sales price: When an interest rate is agreed upon, you make more money as the buyer pays off the purchase price.

 

  • Retain title: In the case the buyer defaults, you keep the down payment and any money paid on the house.

 

  • Continuous income: Similar to a rent agreement, seller financing gives you a steady source of income.

 

  • Less work: When you transition from landlord to lender, you have less responsibilities with the property.

 

  • Tax advantage: The IRS recognizes an installment sale as a way to defer capital gain. You can spread out your tax liability over several years instead of paying 100% of the tax in the sale year. It also makes it easier to offset the gains.

 

  • Sell faster: Without need for mortgage approval, you can sell and close faster.

Disadvantages of Seller Financing

  • Buyer uncertainty: If a buyer defaults or refuses to make payments, you may have to initiate the foreclosure process, depending on your agreement with the buyer.

 

  • Abandonment of sale: If you accept a smaller down payment, the buyer may later abandon the sale because a small investment is at stake.

 

  • Repairs: If you take back the property, and there are damages, you may be responsible for repairs, depending on your agreement with the buyer.

What is a Lump-Sum Sale?

A lump-sum sale is a one-time payment for the total amount due, rather than that payment be broken into smaller installments. This is a better option for homeowners trying to sell their primary residences. With a lump-sum sale, capital gains is not so much an issue as it is when selling rental property.

Selling to an Investor for Cash (or via Seller Financing)

Real estate investors will pay cash for properties in any condition. These properties can be a primary residence or rental property, and be damaged, neglected, or have bad tenants. In fact, if you have tenants, only an investor will purchase your property, so you can skip listing and keep the 3% to 6% commission you’d pay a realtor.

If your goal is also to avoid capital gains, seller financing is a great option. We screen investors to avoid scams and frauds. You can request an offer on your property, and we’ll pull offers from trustworthy investors, guaranteed to have the financial backing to pay you.

If you have any questions about investors, we have the answers.

landlord and investor shake hands when to sell your rental property

When Should You Sell Your Rental Property

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The best reason to become a landlord is to make money and have a passive income. But it has risks, and if the stress is higher than the revenue, it may be time to sell your rental property.

Homeowners look at the market when deciding to sell. As a rental property owner, you have additional factors to consider. Here are 6 signs it is time to sell your rental property.

1. You’re a Remote Landlord

Being a landlord is a hands-on, on-site job. There are a lot of things you have to do:

  • Find and screen tenants
  • Sort paperwork
  • Ensure regulations are met
  • Repair and maintain the property

Your landlord duties take time and effort. Performing from a remote location makes things more difficult, for you and your tenants.

Showing, repairs, evictions – these all require a drive, or worse a flight. You can hire a property manager to handle things for you, but then a portion of your passive income goes to them.

2. Too Much Trouble

Being a landlord, you are always on call, should a tenant need you. Do your tenants call late at night when a system is busted? Or maybe they just like to nag you?

Do your tenants damage the property time and time again? Are they noisy, and you get constant complaints from neighbors? What about involvement with the police for one reason or another? These horror stories are real.

If a property is more trouble than it’s worth, and being a landlord becomes a full-time job, it is time to sell.

3. You’re Ready to Move On

Things change and being a landlord no longer fits in your life plan. It’s fine. 

Maybe you need to move, or another source of income became available, or you need to focus on your family. Whatever the reason, you cannot afford to put your time and money in your rental property anymore. You need to sell it so that it’s one less thing for you to worry about.

4. Too Many Expenses

Let’s face it, maintaining a living space for tenants is expensive. There are repairs and scheduled maintenance, not to mention property taxes and insurance, and it all adds up. 

If it costs more to keep the property functioning and up to par with health codes than its yearly profit, selling is the more affordable option.

5. No Positive Cash Flow

You became a landlord to make a passive income. If you are losing money or just breaking even, it is time to reevaluate your situation.

There are several reasons your cash flow could be diminishing:

  • Costly repairs and maintenance;
  • Property tax increases;
  • Unpredictable and unexpected vacancies;
  • Utility and insurance costs rise; or
  • Market rents drop.

These are the risks you accept as a landlord. Managing rental property is a numbers game, and if you don’t come out on top, why continue?

6. Non-Paying Tenants

Of all the common landlord-tenant issues, tenants that pay late or not at all is the worst.

Evictions are costly and time-consuming, or maybe you are not allowed to evict the tenants. A case like this would be if the tenants file for bankruptcy and the court grants them an automatic stay. They stay in your rental property, free of rent, and you lose out on payments.

So What Do I Do?

If you want to sell fast, forgo repairs, and unburden yourself of bad tenants, sell to a real estate investor. Most investors pay cash for rental properties “as-is” – damaged, neglected, and even with bad tenants still living there. The investor pays all closing costs and additional sale fees, saving you money on traditional listing sales.

You can enjoy a quick closing, in a month, 15 days or less – you choose the date.

Using your cash proceeds, you can then invest in a new rental property and resume a passive income, or use it as needed. You have the cash, you have the choice. You are no longer locked down by a problem property and landlord responsibilities.

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5 Common Landlord-Tenant Issues and Solutions

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Being a landlord is not easy, especially when you have bad tenants. Here are common landlord tenant problems and possible solutions.

1. Late or No Rent Payment

The most common issue with bad tenants is their inability to or refusal to pay the rent.

SOLUTION

If your tenants often pay late, discover if they are having financial problems. You could set up a temporary payment plan for them and prorate late fees.

If your tenants refuse to pay at all, you can send them a pay or quit notice. It outlines how much is owed plus late fees and when they must pay. If they ignore this, you can pay them to move out. It is a less satisfying option, but your goal then is to find a new paying renter as soon as possible.

If worse comes to worst, you can evict non-paying tenants. This requires lengthy court proceedings and money out of your own pocket though. If the court sides with you, law enforcement will remove the bad tenants by force.

2. Noisy Tenants

Sometimes your tenants are noisy, and they disturb their neighbors. These neighbors then complain to you or maybe call law enforcement.

SOLUTION

It is a tricky situation, but the best you can do is talk to your tenants about the noise.

You might include a clause in your agreement that says what happens if a tenant disturbs the peace. It does not have to be a solution your tenant likes. It can be a penalty fee or so many strikes, and they must leave. Discuss your options with an eviction attorney.

3. Damages (Intentional or Otherwise)

There is nothing more frustrating than a tenant who is destructive to the property. They neglect maintenance, break appliances, stain carpets, put holes in the walls, and leave trash lying everywhere. Sometimes they do it out of spite because you spoke with them on another issue. Other times, they are just dirty tenants.

SOLUTION

To minimize damages, you can have in your agreement that you will perform monthly visits to inspect the property. If there are damages, tenants must pay a fine, and if this bad behavior persists, you will evict them.

4. Rule Violations

Your lease agreement should list tenant rules and requirements. These include restrictions on pets, subletting, noise, etc. If a tenant breaks the rules, the agreement will also outline the forthcoming penalties.

SOLUTION

Most times you can fine bad behavior. Other times, if the tenant does not give you too much trouble, you might adjust a rule in exchange for compensation. For example, if you do not allow pets, but the tenant gets a dog, you can amend the lease to require a pet deposit. That extra money will cover any damages caused by the animal.

5. Tenant Files for Bankruptcy

Most times, when a tenant files for bankruptcy, the court grants them an automatic stay. You cannot evict them and may lose money on unpaid rent till the case is settled. The tenant has 60 days (or more) to decide if they will assume or reject their lease.

This situation is a massive headache, and there is little you can do but file a Stay Relief Motion and wait for the court and tenant decisions.

SOLUTION

Sometimes you need a fresh start. You can sell your problem property and use the money to buy a nice rental property in a better location. However, selling by way of a traditional listing takes time. You often have to evict the bad tenants, make repairs and perform maintenance. It gets costly! Consider instead selling to an investor.

Most investors pay cash for a rental property “AS-IS”. They will buy it with its damages and its bad tenants still living there. Most are also open to seller financing, and you gain interest over time. You do not have to do anything but choose the closing date, which can be in 7 days or less.

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3 Tips for Selling a Rental Property with Tenants

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The pandemic of COVID-19 has created a roller coaster of effects in the real estate market. To prevent the spread of the virus and minimize the crisis impact, the federal government and several states, cities, and counties are prohibiting landlords from evicting tenants, be they bad or behind on rent.

Times are difficult, and rent collections are essential to help pay off mortgages, property taxes, utilities, and maintenance. Are you a landlord with a tenant-occupied house to sell? Do you have bad tenants? Are they not paying rent? Here are some things to know and consider.

1. Prior notice of a showing

Typically, you would ask tenants to be off-site during showings, but most people are staying home with the times being what they are. This can risk bad impressions between tenants and new landlords who come to see the property. Ask tenants about their schedules to find the times that are most convenient to bring buyers over. Also, state laws require you to give tenants prior notice of a showing, usually 24 hours’ notice, so they have time to prepare.

2. Presentation matters

Giving notice to tenants when there are showings also gives them time to make their living spaces presentable; at least, you hope they will take the time to clean and clear their clutter. Bad tenants may not be so cooperative. You can offer incentives, like refunding the security deposit or paying for cleaning and maintenance services, to inspire them to keep the house. This will cost you money, but the payoff is worth it if it helps sell the property.

However, if there is property damage because tenants are destructive and neglect responsibility, it is unlikely that a new landlord will want to deal with them, and it will be difficult to sell the house.

3. Transfer of lease agreements

Keep in mind that a transfer of property rights means a transfer of lease agreements. Be sure to review the items in these agreements to ensure you are not in breach of contract. There may be terms and conditions that require you to notify tenants within a certain number of days of new management. You will have to oversee the transfer of security deposits and rent receipts to the new owners and inform tenants of this action. You will also have to inform tenants of how they will pay rent to the new landlord moving forward.

If you would like to sell your property fast, without navigating bad or non paying tenants, consider selling your rental to an investor. Most investors will make a cash offer on a property, regardless of tenant issues and leases. You can offload a property that returns little profit for a sure deal, enjoy a quick closing, and be free of difficult tenant-landlord relations.