How To Sell A Rental Property With Tenants In Florida

Owning an investment property can be a great way to build your financial future. However, there may be situations where it is necessary to sell a rental property. If you have tenants currently renting the property, this can complicate the process.

Landlords must consider tenants’ rights and the terms of any lease or rental agreement when selling a property. This includes making sure that the tenant has proper notice of showings. In some cases, buying a tenant out of a lease may be the best option if their presence may complicate the sale.

Based in Lithia, Eaton Realty offers real estate services to clients throughout West Central Florida. With experience in both property management and real estate sales, we can help you navigate the complications involved in selling a rental house with tenants in Florida. Reach out to our real estate team today to learn how we can help you buy, sell, and manage investment properties.

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Tenants’ Rights When Selling a Rental Property

Under Florida’s Landlord-Tenant law, tenants have certain rights that you must consider when selling a rental property. In particular, landlords should consider a tenant’s right to notice and whether they can be asked to vacate the home when showing the property.

Entering For Showings

First, landlords have the right to enter a rental property for certain reasons - including to show it to prospective buyers. To do so, landlords must typically provide the tenant with notice and ask for their consent. However, if the tenant unreasonably withholds consent, the landlord can enter the rental unit as necessary for showings.

The best way to navigate showings is to work with tenants in a cooperative way. It is their living space, so they should have some say to schedule showings conveniently. Coordinating with your tenant will also increase the likelihood that the house will be in good condition during showings.

Under the law, tenants cannot “unreasonably withhold” consent to access the rental property. At the same time, landlords cannot abuse the right of access. Taking a collaborative approach can help to avoid problems - and make it more likely that you will be able to sell the house.

Asking The Tenant To Move Out

Second, depending on the lease or rental agreement and its terms, you may or may not be able to ask a tenant to move out of the property. If the rental agreement isn’t for a fixed term - such as a month-to-month agreement - then you can simply provide notice to the tenant in accordance with Florida law. For example, if your tenant has a month-to-month lease, you will need to give them at least 60 days’ notice to vacate.

If your tenant has a fixed lease term, then your ability to ask them to leave will depend on the lease's terms. Many leases contain a clause that allows the landlord to ask the tenant to vacate by giving them notice (often 60 days) if they are going to sell the property. If your leases contain such a term, you can give your tenant proper notice and ask them to leave.

Without such language, you cannot ask your tenant to leave or evict them unless they have broken a lease term. However, as described below, it may be possible to work out an arrangement - like a cash for keys deal. In other words, you may be able to buy your tenant out of their lease to sell the property more easily.

Of course, your tenant doesn’t have to take this deal. If they don’t want to move out and there isn’t a legal mechanism to require them, then any buyer will have to honor their lease. Existing leases is a major consideration for any landlord contemplating selling a Hillsborough County rental property while tenants are still living there.

Should I Sell a House with Tenants Living In It?

There is no easy answer to whether you should try to sell a house with tenants. Ultimately, it depends on the rental agreement, the type of property, the tenants, and why the buyer is interested in the property.

For some buyers, having tenants already in place is a great thing. They can assume the lease and not spend time or money trying to find a tenant. Many real estate investors appreciate that a property is attractive to tenants and that someone is already paying rent. This outcome is more likely when the type of property is more likely to be rented, such as an apartment building or a multi-unit house.

A property with tenants may also appeal to buyers who ultimately want to live in the home but aren’t ready to do so quite yet. The tenants’ rent can be used to pay the mortgage while they sell their current house or take other steps to prepare to move.

Of course, the tenant(s) will also play a role in whether or not you should try to sell a house with them living in it. If a tenant has been a problem, is behind on rent, or doesn’t keep the house neat, it will probably not help you sell the place. On the other hand, if the tenant has been there for years, always pays rent on time, and keeps the place sparkling, then many real estate investors will be only too happy to continue their lease.

Even with a great tenant, trying to sell a house with someone living in it can make the process harder. Dealing with showings can burden a tenant, from trying to keep the place clean to having strangers in their house. It also means you must coordinate with real estate agents, potential buyers, AND the tenant when scheduling showings.

For this reason, it may be wise to try to buy the tenant out of their lease if you cannot legally ask them to vacate. A buyout could include offering them cash to cover their moving costs and other expenses or even offering them a place at another rental property you own. A cash offer should be attractive enough to get the tenant to move - but not so large that it cuts into your profits.

What To Do If The Tenant Doesn’t Want To Move

If the tenant doesn’t want to move, you should do your best to keep them happy. This may include:

• Making showing times easy for the tenant. For example, if they work the night shift, you may coordinate showings so that they happen in the afternoon or evening (and not when your tenant is trying to sleep).
• Ask the tenant to leave the property during showings - and sweeten the deal with something like a gift card to a local restaurant. Most buyers don’t want to deal with someone in the house when viewing it, so spending a little bit of money can be incredibly helpful.
• Offer to help the tenant keep the rental unit in great shape while on the market. You could pay for a cleaning service or lawn care (if they’re responsible for the yard) to take some of the burden off their shoulders.

Taking these steps will cost you some money - but may pay off in the long run if you can turn a profit on your rental property. Above all, you should focus on ensuring you aren’t violating the law or your lease at any point. A skilled property management company like Eaton Realty can walk you through the process and help you find a buyer and deal with your tenant.

Want to Sell a Rental House? Call Eaton Realty

Selling a rental home while tenants are still living there can be tricky. Having a tenant could be attractive to prospective buyers - or it could be a logistical nightmare. Understanding your rights and options as a landlord (including the ability to buy a tenant out of a lease) is critical if you want to sell a rental property.

Eaton Realty represents buyers, renters, sellers, and investors as they navigate the real estate market in Hillsborough County. We also manage properties for landlords in the greater Tampa area, assisting them with both the day-to-day management of properties and bigger matters like selling a property. If you’d like to learn more, fill out our online contact form or call us at 813-672-8022 to talk to a team member.