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.