Selling a home with tenants can be challenging, but with the right strategies—like clear communication, legal compliance, and timing the sale strategically—you can navigate the process smoothly and successfully.
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Selling a home that is currently occupied by tenants can be a maze of legal obligations, financial considerations, and interpersonal dynamics.
While it is entirely feasible to sell a tenanted property, landlords need to be well-prepared to address various challenges that arise throughout the process.
According to Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, one of the most significant hurdles faced by landlords is the existing lease agreements.
“If the tenants have a fixed-term lease, the new buyer must honour that lease until it expires or the tenants decide to vacate. This situation can restrict the pool of potential buyers to primarily investors rather than owner-occupiers," he said.
Goslett said buyers do have the option to request that the property be vacant before the transfer of ownership is finalised. “In this case,” he advises, “if the homeowner accepts the offer, it will be their responsibility to ensure that the tenant vacates the property before the sale is completed.” This scenario necessitates a close examination of the lease agreement's stipulations regarding early cancellations, as homeowners must not act unlawfully in evicting tenants ahead of schedule.
To minimise such complications, Goslett recommends that sellers consider timing their listing to coincide with the expiration of the lease.
"If the sale cannot wait having an honest conversation with your tenant can prove helpful. Offering incentives, such as a reduced rental rate, moving assistance, or financial compensation, can encourage tenants to cooperate in vacating the property early," he said.
The process of selling a tenanted home also involves arranging showings, inspections, and valuations, which can prove disruptive for tenants.
"If tenants are uncooperative, it can be challenging to present the property in its best light," Goslett said.
Thus, while it may be tough to accommodate a tenant’s schedule, respecting their rights is crucial to avoiding legal complications. Maintaining a transparent line of communication throughout the sale process can also foster tenant cooperation. In many cases, partnering with a rental agent may alleviate stress for the homeowner.
On the positive side, targeting real estate investors can be a strategic approach for sellers.
“Investors may recognise the value in acquiring a property with a reliable, existing tenant,. Highlighting such features in the property listing can attract the right buyers, who appreciate having a ready-made income stream," Goslett said.
Although selling a home with tenants presents its fair share of challenges, effective communication, legal understanding, and strategic planning can enable landlords to navigate the complexities with success.
"Whether selling to an investor or preparing to wait for the lease to expire, it's essential to find a balance between the needs of both tenant and buyer.
"Engaging a trustworthy real estate professional can significantly streamline the entire process," he said.
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