San Diego Property Management Blog

Selling a Rental Property While a Tenant Is Still Living There

Can you sell your rental property while a tenant is still living there?

Can rental property owners sell while a tenant still lives there? The answer to that question is yes, but there are certain things you need to be aware of before you do. Today I’ll share some of my guidance on these issues, as there are advantages and disadvantages to selling this way.

A real estate sales transaction is subject to the existing lease agreement. You’re not just selling the property—you’re selling the lease agreement, and the tenant is along for the ride. But as a landlord, you can’t just tell your tenants that you’re going to sell the property and kick them out. The property buyer needs to honor the terms and conditions of the lease as well. The only exception to this that I’m aware of is if the property is in foreclosure, but there aren’t too many of those right now.

If you’re planning to sell soon, don’t encumber the property with a long-term lease. That way, you’ll leave yourself with more options.

Also, there are some benefits to selling with the tenants staying in place. Think about it: There are no costs to make the home ready to sell or re-rent it. You can sell it directly to a new investor, and you can save money on property turnover costs, which can be substantial. 

“Don’t be afraid to sell with your tenants still in place.”


The downside to selling this way is that you’ll have a smaller pool of buyers to sell to, as a property with a tenant in place only appeals to investors, not Buyers who want to reside in the Home. Additionally, you need your tenant to cooperate; few people like change when it comes to their living arrangements. After all, there will be showings, inspections, and a whole bunch of inconvenience on the tenant’s part.

If they’re not thrilled with your plans, you could always offer them a $200 to $250 monthly rent credit during the sales process to gain their cooperation. That usually gets the job done. For our tenants, we also tie the credit to the tenant’s having the home in good, rent-ready condition for showings—meaning they keep the unit clean, decluttered, and otherwise presentable.

Finally, make sure your lease allows for showings. A solid lease will state that you, as a landlord, have the right to sell the home and bring in prospective buyers with 24-hour advance notice. 

The bottom line is that you don’t have to be afraid to sell with your tenants in place. Just remember these points and you can successfully sell—you might even be able to sell the property to your existing tenants.

If you have any questions about the process, don’t hesitate to reach out to me. I’d love to help you.