A rental property is such an excellent investment because you can have it leased for a steady source of income or sell it in the future for a one-time payout. The latter option is a wise move if the real estate market is ideal for a property sale, if it isn't generating more income, or if you have other business plans. 

One of the frequently asked questions is whether or not you can sell your property with a tenant in it. In this article, we will tackle this question so that you know more about selling a tenanted property.

Selling your property with a tenant

Before going any further, the answer to the main question is, yes, you are legally allowed to sell your property even though you still have a tenant occupying it. In fact, you can do so with or without necessarily informing the tenant. For courtesy sake, however, it's still best to inform your tenant so that they will be aware of the change of ownership. Take note that your property sale includes the transfer of your existing lease with your tenant to the new property owner.

The process of selling a tenanted property

If you plan on taking this route, it's imperative to follow some crucial steps to avoid complications during the selling process. Nevertheless, rest assured that selling a tenanted property can be straightforward and relatively easy. Here are some vital steps to follow:

• Inform your tenant: As mentioned, it's best to tell your tenant about the property sale, although you aren't legally required to do so, yet is more for formality's sake. The ultimate purpose is to make your tenant aware and avoid confusion or problems in the future. Be sure to open a line of communication and readily answer your tenant's queries if they have any.
  

• Promote the property: Once you've informed your tenant, you can start marketing your rental property by putting it in several listings. While you're at it, be sure to indicate that it is currently tenanted. Include when the current lease expires, various photos of its areas, and information about the rental income.
  

• Close the deal: Once you've gained a few worthy prospects, you can choose the one whom you can sell your tenanted property. When closing the deal, be sure to include the existing lease on the contract where both parties should agree. Doing so will protect both parties, including the tenant, who will be impacted during the transition.
  

When a tenant stays in or moves out

Now that you know a little more about the property sale process, let's take a look at the three common scenarios associated with selling a tenanted property. Keep in mind that the tenant can stay or move out. Consider the following information:

• If a tenant is on long-term rent: As indicated on the contract agreement, your existing tenant can continue to stay under a new property owner until the lease expires. This means that the new owner cannot force your tenant to leave.
  

• If the tenant agrees to move out: In some cases, it's best to market your property without a tenant. If this is what you intend to happen, then you may talk to your tenant and have them move out with a monetary incentive in exchange.
  

• If the tenant has a month-by-month rent: It's good if your tenant is on a month-by-month lease, as you can wait for it to expire. However, be sure to give your tenant at least a 60-day notice so that they can better prepare for their move. 
  

Conclusion

At this point, you now know that selling a tenanted property is not as complicated as you initially expected. Nevertheless, be sure to follow the key steps given for your property sale, and consider whether a tenant will stay in and move out.

If you don't know how to proceed with this process, it's best to rely on a property management company that can assist you every step of the way. They will ensure that your property gets sold at a reasonable price without compromising your tenant staying in it. 

We're one of the leading property management firms in Ottawa, Ontario. If you need a property manager to help sell your tenanted property, get in touch with us today to see how we can help!