Selling a House When You Have Tenants

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Nov 3, 2022

Looking to sell your rental property and worried about your renters? Well, the first thing you need to consider in such a situation is the tenant’s rights as stated in your lease or rental agreement. You also need to look at what your state and local laws dictate about selling a house with a tenant.

If you don’t handle the process delicately, selling your own house with a tenant might even land you in trouble with the law. Here are some tips to consider:

How to Sell a Rental Property that Has Tenants

There are two main things you need to think of when you’ve made up your mind to sell your rental property. Are you willing to wait for the lease to expire before you proceed with the sale? Or are you considering selling with your tenants still living there? The two options can make or break your sale.

There are many options to put in mind when planning to sell your property. Let’s explore those options to help you find one that best suits you.

Sell the House During an Existing Lease

The first option when considering selling your rental property is selling the house with the tenants still in place.

Your renters must cooperate to ensure the house is in good condition. They should also agree to vacate the property during a home showing and they must also be away from the house during home inspection and appraisal.

Part of your agreement may involve offering your tenants an incentive, such as reduced rent while the house is on the market. Selling with tenants still residing in the property comes with its pros and cons.


  • Build-in staging: With someone occupying the house, buyers will have an easier time figuring out how they’ll fit in the house. The house looks nice because of the tenants’ decorations and has the potential to attract more buyers.
  • Attracting investors: Having tenants in the property is a big selling point for a house as it will attract anyone looking to invest. They’ll not have to go through the hustle of finding tenants once they buy the house.


  • Showing difficulty with unhappy tenants: If your tenants are not happy with your decision to sell the house and vacate them, they might not be too accommodative during a showing. You might not predict how they’ll react. An unexpected negative reaction can have a significant impact on your sale.

Cash for Keys Agreement

Your tenant has the right to occupy that property as long as their lease agreement is still active. You can only vacate them if they’ve violated the lease terms. These include failing to pay rent on time, damaging the property, engaging in illegal activity, and being a nuisance to the neighbors.

But if your lease doesn’t have a clause for early termination, you can offer your tenants an incentive so they leave earlier. This kind of payment is known as cash for keys agreement and is mostly used in lieu of eviction. The landlords offer their tenants some money so they can vacate the apartment within a given period.You can also offer your tenants a discount on rent, offer to foot their moving costs, or cover their security deposit for the next house. Just be sure to document everything thoroughly, providing receipts for any money that changes hands so you have a record for future reference. With free-to-use receipt templates available, this is quick and easy.

Offer Your Tenants a Chance to Purchase the House

If you have an amicable relationship with your tenant and they’re in a position to buy the house, they can be your ideal buyers. If the tenants agree to buy, this can be very beneficial to both of you because you can avoid the listing processes and save on the fees for selling a house.

You won’t have to list your property on the MLS, show it, or stage it if you’re selling to your tenant. But you’ll still have to carry out the home inspection to find out if the house has any unknown issues. You’ll also need to work with a real estate agent to help you draft the purchase agreement.

Wait Until the Lease Expires

One option to consider to sell a house with a tenant is to wait for the lease to expire before proceeding. This option works better for those with a month-to-month lease situation. This means if you have a lease of up to three months, it will be better for you to wait for the period and then proceed with the sale.

This situation is much more flexible, but some pros and cons come with this option.


  • You get time for updates: Waiting for the tenancy agreement to expire before selling allows you to get time to update the house and improve its appearance. You’ll clean, repair, and carry out some cosmetic updates that can help you make more profit on the house sale.
  • No timing issues with closing: Getting the house unoccupied by the time you list it, you won’t have to worry about timing issues. It doesn’t matter if the house sells faster than you predicted because it will be ready anyway.


  • Mortgage carrying costs: You might not sell the house immediately after the tenants vacate. There’s time to prepare for sale, list, accept offers, and close the deal. All this time, you’ll be getting on a hook for your mortgage payment.

Other Considerations When Selling a House with a Tenant

The tenants’ rights start with how much notice you’ll give them to vacate your property regardless of the lease agreement. Most states require that you give a 60-day notice. If you’re selling with tenants, you must also give them notice before showing and inspections.

Notify your tenants about the transfer of security deposits and receipts to their new landlord. Introduce your tenants to the new property owner, so they understand how they’ll be paying rent moving forward.


Selling a house with a tenant doesn’t have to be a big deal if you understand the ropes. All you have to do is understand the rights of your tenants and abide by the lease agreements. Other times, communicating amicably with your tenant and coming up with a mutual agreement can do the trick.

Find a reliable real estate agent to help you through the entire process. If you’re looking to sell your house and don’t know where to start, SimpleShowing can help. Contact us and we will guide you through all the nitty-gritty details of selling your property.

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