Renting out your house to tenants may have initially seemed like a good way to make money each month. But now, you are stuck with bad tenants who don’t pay their rent on time, damage the property, and disrupt the neighbors. You may be researching: Can I sell my house with a tenant in it in Arizona?
The short answer is that yes, you can generally sell a house with a tenant in it. But you will need to take care not to violate the terms of their lease agreement.
Here is what you need to know about selling a tenant-occupied house in Arizona.
Can You Sell a House With a Tenant?
Your first step when determining whether you can sell a house with a tenant is to review the lease agreement. Violating any terms therein could lead to legal issues, so you want to ensure that any steps you take align with the lease.
For month-to-month leases, you may be able to terminate the lease with proper notice under Arizona law, which is typically 30 days.
If your fixed lease agreement includes terms that allow you to sell the property and ask the tenant to vacate with proper notice, selling the home may not be too challenging. But most lease agreements do not include such provisions. If your lease does not address the sale, you generally need to uphold tenants’ rights, which permit them to stay in the unit until the end of their lease.
That does not mean you cannot sell the house. You just need to ensure that the tenant can continue living in it under the new owner.
Reasons You May Consider Selling a House With a Tenant in It in Arizona
You might consider selling a rental property with tenants in a few different scenarios.
- You have bad tenants. Perhaps you are tired of dealing with bad tenants and would rather wipe your hands of the property and move forward.
- You no longer want the responsibility of being a landlord. Owning a rental property is considered “passive” income, but it might cost you more time and money than you initially realized. When you sell the home, you can take the proceeds and put them toward a different investment opportunity or major expense.
- You cannot afford upkeep on the property. Maintaining a property that you don’t live in can be expensive, especially if you suspect that the tenants are causing some of the issues that keep cropping up. Continuing to manage the property may be costing you more money than it is worth.
- Property taxes have increased. Perhaps the property taxes on the house have increased to the point that you are not making much through the monthly rent.
Transferring a Tenant Lease to a New Owner
When you sell a home with tenants and an active lease, the lease often transfers to the new owner automatically. The new owner becomes the landlord and must honor the original lease terms until the lease ends.
You would need to give the new owner all of the lease information and tenant details. Other landlord considerations when selling property with tenants include:
- Documenting the tenant’s security deposit and transferring it to the new owner to ensure that it does not become lost in the shuffle
- Ensuring that the new owner is willing to uphold the responsibilities of being a landlord
- Having the new owner send a written notice to the tenant stating that they are the new landlord
- Communicating the change to the tenant and assuring them that their lease will transfer to the new landlord
Tenants’ Rights Regarding Showings and Access in Arizona
Selling a property generally involves showing it to potential buyers. This can be tricky when you have tenants living in the property at the time.
Tenants have certain rights under Arizona law regarding property showings:
- Tenants do not need to vacate the unit during showings.
- You must provide 48 hours’ notice for showings.
- Showings must occur during reasonable times, not early in the morning or late at night.
- Tenants are not obligated to clean the unit for showings.
Be sure to uphold these rights as you schedule showings for the property. Also, consider that if you have bad or uncooperative tenants, they may not be willing to tidy the residence before the showing, which could paint a poor image of the property and deter potential buyers. Selling to a traditional buyer can be challenging in this scenario, and you may want to wait until the tenant has moved out to clean, stage, and list the property.
Exploring Your Options for Homes With Tenants
Can you sell your house with a tenant in it in Arizona? If you no longer want to own this property, you have a few options for navigating the selling process.
- Wait until the end of the lease, then sell the home. Sometimes, the easiest option is to wait until the fixed-term lease ends, then sell the house without tenants. Be sure to provide at least 30 days’ notice that you will not be renewing the tenant’s lease. This option may not be feasible for properties with extended lease terms or if you are on a time crunch for selling the home.
- Sell the property to the tenant. You can consider offering for the tenant to buy the property. This is more common in cases in which tenants have rented the property for some time. Some landlords offer a “rent-to-own” program, but you may not prefer this if you want to sell the house outright.
- Negotiate a “cash for keys” buyout. If you want the tenant to vacate the property before you sell, you can consider offering a “cash for keys” buyout in which you essentially pay them to move out before the end of their lease. You may want to work with an attorney to draft a contract that details the terms of the buyout and does not violate your existing lease agreement.
- Sell the tenant-occupied property to another buyer. Finally, you may try to sell the property with the tenant and a lease agreement in place. You will need to find a buyer who is willing to honor the lease agreement and serve as the property’s landlord.
In some cases, selling a house with a tenant in it may help you attract potential buyers. You can guarantee that the new owner will have tenants until at least the end of the lease, generating rental income for them that can help offset the costs of the property purchase.
Selling a Tenant-Occupied House to a Cash Buyer
If you definitely want to sell your house with a tenant in it in Arizona, selling to a cash buyer like Joe Homebuyer may be your best option. This solution offers several benefits:
- No need for showings: You won’t need to worry about arranging a showing with the tenant and upholding their tenant rights when you schedule showings. Cash buyers can purchase the property without the need for showings.
- Purchase the home with existing tenants: Finding a buyer who is willing to assume the lease agreement and act as the new landlord can sometimes be challenging. Cash buyers welcome these types of opportunities, allowing you to avoid the lengthy process of listing the home on the market and waiting for a buyer.
- No fees or closing costs: With a cash buyer, you don’t need to pay any fees or closing costs when you sell the property. The cash buyer covers these expenses for you.
- Close on your timeline: You can choose a closing date that works for you. This can be helpful if you want to have a buyer lined up to purchase the property as soon as the tenant’s lease ends. On the other end of the spectrum, cash buyers can often close within seven days, allowing you to gain a clean slate as soon as possible.
- The buyer makes all repairs for you: If the tenant has damaged the property, a traditional buyer may require you to make repairs before closing. Meanwhile, a cash home buyer can make all repairs for you and purchase the house completely “as is.”
- The buyer communicates with the tenant: A cash buyer can work out an arrangement with the existing tenants to either buy out their lease or continue acting as their landlord until the end of the lease term. You don’t need to worry about taking care of the tenant issue before you sell.
Request a Cash Offer From Joe Homebuyer Today
If you are looking to sell a house with a tenant in it in Arizona, working with a cash buyer could be the easiest option. Joe Homebuyer purchases homes with tenants and other challenging situations, helping you move forward.
If you need help navigating an Arizona rental property sale, we would be happy to share more about our hassle-free buying process. Request a free cash offer with Joe Homebuyer today by calling 602-529-1268.
