How to Sell Your Trailer Park While Tenants Still Live In It
Having renters in a trailer park, you’re trying to sell makes an already complicated process even more complex. For the best advertising and showing of the property, you’ll need to consider both the tenant’s rights under the lease or rental agreement and state or local law and your own needs as the seller.
Having a tenant in place is possibly a plus for some buyers, but it could also be a deal-breaker for others, depending on the situation. Overall, a property will be easier to show and sell if there is no tenant there. If you think that not having a tenant will help the sale of your mobile home park, you might be able to end the lease before the deal is done. If you decide to rent out the trailer park while trying to sell it, you’ll want to ensure the tenant is happy and willing to help.
Can I Sell My Trailer Park With Tenants Still Living In It?
When a landlord wants to sell, this is often the first question that comes up. The short answer is yes. You can sell a mobile home park where someone else is still living. Most state laws say tenants can stay in a rental property after it has been sold as long as the lease or rental agreement is still in effect. Even though you can sell with a tenant, that doesn’t mean you should.
Before selling your property, you should consider the pros and cons of doing so while a tenant is still living there. There are cases it might be a good idea for the renter to stay in the house during and after the sale. But since you don’t have a crystal ball, all you can do is think about the pros and cons of selling your property with a tenant already living there.
The Pros and Cons of Selling a Property With Tenants In It
When deciding if selling with a tenant in place is a good idea, you should consider the following things.
The Terms of the Lease
If the tenant pays month-to-month, you or a new buyer could give the amount of notice required by state law to end the tenancy. But if the property is in an area where rent is controlled, you’ll need to check the laws to ensure that the new owners can end the rental agreement. Talk to your real estate agent about whether it makes sense to let the buyer decide if they want to keep a month-to-month tenant or to get rid of them before the sale closes. If the tenant has a lease, you should consider how much time is left on it. Some buyers, like investors, might be interested in a property with a long-term tenant. However, many buyers who want to live there themselves would be turned off by this.
The Group of People Who Might Buy
Many who invest in real estate are happy to buy a property that already has a tenant paying rent on time and has a lease or rental agreement. If the tenant’s lease ends soon after the sale of your mobile home park closes or if the tenant is month-to-month, the property might also appeal to buyers who want to live there but can’t move in right away (because they have to sell their current house or move) or don’t mind waiting a bit. But if you have a tenant in a single-family home that is likely to be bought by a family that wants to move in quickly, having a tenant will probably cut down on the number of people who want to buy the house.
The Renter and the Situation of the Rental
When you sell, considering the personal traits of your tenant will be necessary. A tenant who doesn’t keep the place clean, doesn’t respond to messages, or is just generally hard to deal with will only make it harder to sell. On the other hand, a tenant who keeps the place neat and clean, answers messages (like requests for showings), and is willing to help can be a plus. Also, don’t forget about the money: Tenants who owe money or pay less than the market rent are likely to be a hassle that few buyers want to deal with. What to do if you have a tenant who makes it hard to sell your mobile home park?
What are your options if you come to the conclusion that selling without a tenant is the best choice after weighing the pros and cons?
If the tenant pays rent every month, you’re in luck. Just give the tenant the notice required by state law to end the lease. If you live in a rent-controlled area, you should check the law to see if selling the property is a good reason to end the lease.
If your renter has a long-term lease, it might not be easy to get them to leave. Most likely, your best bet is to try to talk with the tenant. Offering money to the tenant is a common way to get them to agree to change the lease and move out early. If the tenant agrees to the deal, you can either have them move out before the property goes on the market so you can clean and maybe “stage” it, or you can say that the property will be “vacant upon closing.”
Negotiating with the renter to move out early could be risky, though. If the tenant decides not to follow the new terms and stays in the property after the closing, the new owner may have to kick the tenant out. The new owner could then sue you for all the costs of getting you out of the house. If the timing is correct or if you can’t agree with the tenant, you will want to wait until the lease is up before you put the listing on the market. Notify the tenant in the way that the lease says you must if you want to sell the property and won’t be renewing the lease.
Things to Think About When Marketing a Home With a Tenant Living There
Assuming the tenant will stay after the closing, and depending on the size and layout of your property, you might want to market it as both a primary home and a potential investment property. Let the buyer choose what to do with it. Some people who want their own home don’t mind buying a primary residence with a tenant if they don’t plan to move in immediately.
There are some things a seller can do to make things go smoothly when you are trying to sell your mobile home park, and there is a tenant living there, even if the tenant won’t stay after the sale. If the tenant is moving out at closing, keep in mind that moving is complicated and that keeping track of showings and keeping the place clean might not be at the top of their minds.
Make It Easy for the Renter to See the Place.
Tell the person selling the house that the tenant needs at least 24 hours notice before showings. Tell the agent if there are times when the property can’t be shown because of the tenant’s schedule. The listing agent will make sure that buyers and other agents who want to see the house do so at the times you specify. You can always talk to the tenant and ask if you can show the property with less notice, but unless you come to a new agreement with the tenant, the lease will tell you how much notice you need to get in.
Ask the Renter to Leave the Property While it is Being Shown.
No buyer, whether they are an investor or not, wants to be followed around by a resident, especially one who is upset about having to move. The buyer should be able to look at the house whenever they want. Give the renter a gift card to a coffee shop nearby so they can use it while the property is being shown.
Make It Easy for the Renter to Keep the Property in Good Shape.
Offer to hire someone to clean or take care of the yard while the house is on the market. Since the tenant has nothing to do with the sale of the property and may even be moving out, it’s essential that you, the seller, do what you can to keep the property in good shape.
If necessary, help the tenant find a new place to live. If you have other rental properties, let the tenant know about any openings that make sense. If you’re not an investor, you could tell the tenant where to find local listings or say that you’ll ask your friends if they know of any properties that are for rent.
Make Sure the Rent is Paid Up to Date by the Tenant.
Some landlords are more forgiving than others regarding people who are late on their rent. If the tenant is still living there and hasn’t paid rent, it’s time to do something. A delinquent tenant is not a good selling point. One option is to let the tenant off the hook in exchange for them leaving. If tenants can’t pay rent, the landlord can take them to court and evict them.
Most of the time, financial incentives can help, but sellers shouldn’t forget how important it is to be kind to the tenant and remember that the property is still the tenant’s home while it’s for sale. A tenant who isn’t happy can kill a sale, especially if they don’t let the house be shown or if they stop cleaning.
Consider Taking an Instant Cash Offer to Sell Your Mobile Home Park
You can quickly eliminate the stress of selling your mobile home park with tenants still living there by accepting an instant cash offer from Houston Capital Home Buyers. Contact us and let us make you an offer so you can sell your mobile home park today!