Steps For Selling Your House With Tenants in London, Ontario
Updated: Oct 1, 2020
Ask the Tenants If They Would Consider Purchasing The Property.
The first step to selling your house with tenants in London, Ontario is to notify the tenants the property is being considered or listed for sale, and ask the tenants if they are interested in purchasing the property. If the tenants have been in place for a few years, they might have become attached to the property, their neighbours or the area or perhaps their children enjoy the school district. This would be a great opportunity for them to buy the house they know they love since they have resided there for a variable number of years. If they are interested, have them qualify for a loan on your property and the purchase process will be much cleaner and smooth as oppose to having prospective buyers coming in and out, bugging your tenants (especially during a pandemic!). You may also consider an owner financing deal to the tenant if they cannot qualify with a traditional lender. This may also be ideal if they have a great payment history, you have a great relationship with them as you know they are dependable. It is a great option to generate truly passive income as property maitenance and repairs are no longer your responsibility as you can now transfer title to the tenant and can generate monthly cash flow.
Review Your Existing Leases On The Property.
Another option for selling your house with tenants in London, Ontario is to review the lease you have in place with the current tenants. Most leases will have some sort of clause about what will happen if the property sells. In a lot of cases, when the property sells the tenant has a certain time frame to vacate the property (double check all legalities with landlord and tenant board to make sure you are within the legal rights). Your tenants may or may not be in a position to locate new housing at the time of the sale, so the earlier you are thinking about selling, the better to inform your tenants, especially if you are serious about listing your house for sale right away. If your property is in a hot market, the house may sell quicker than you think and the tenants may not make it out in time. Above all, it is ethically responsible to work directly with your tenants to ensure that they are on the same page and offer any assitance that they may require to make this experience as least stressful as possible for them.
Wait For The Current Leases To Expire
One of the smoothest steps for selling your house with tenants in London, Ontario would be to let the current leases expire and do not renew it. You may want to still accept month to month payments to cover your expenses or mortgage payment if you still owe on the property, but you would have to make it crystal clear to the tenants that if they have the move out clause in their lease, they would have to vacate the property. Having the tenant leave at the end of the lease without accepting month to month payments may leave you carrying the cost of the property on your own until it sells.
List with Tenants in Place
A lot of landlords end up selling their properties with existing tenants in London, Ontario. This may work to your advantage, especially if the tenants agree to leave and clean their units during house showings because the property would already be staged. On the other hand, the tenants may be upset that the house is being sold and might cause problems when the house is being shown, especially if you have had a troubling history with certain tenants. Be prepared that they may also cause damage to the property when they leave as a result of frustration, especially if they leave on bad terms. This method is the most common method to selling your house with tenants however it is also the most concerning as stress and tensions can be high between both tenants and the landlord. A lot of the time, if someone is looking to purchase a multi-unit building, they prefer to find their own tenants that they feel they can best communicate with and relate to.
Pay the Tenant
The last suggestion for selling your house with tenants in London, Ontario would be to offer payment for them to vacate the property. This might help smooth over any uncomfortable house showings or help them move into their new home. You could also pay them by offering a discounted rental rate. This is a tried and true method that leaves both parties happy - the landlord can move forward with a headache free sale of the house and the tenants have the financial security and are more willing to deal with the hassle of relocating.
Does All Of This Sound Overwhelming? Well...
If you need to sell a house with tenants London, Ontario the fastest, easiest, and most convenient way is to sell the house to a direct buyer. This will eliminate property showings, dealing with upset tenants, and the costs of putting it on the MLS and listing the property with a Realtor.
Contact us here to find out more about our process.