Sell a House with Bad Tenants

6 Tips for How to Sell a Property with Bad Tenants

Being a landlord isn’t for everyone. If you’ve got particularly bad tenants, you may decided to call it quits. In any given year, there are around 3.6 million evictions filed in the US. This speaks to a number of issues, including rising rental prices and a lack of quality tenant screening. Not all of these evictions are successful, and in fact, it can sometimes be difficult to evict bad tenants.

Whether you’re having trouble evicting a bad tenant or you’re just tired of being a landlord, you may decide to sell a house with bad tenants still living in it. There’s no denying that the prospect of buying a property with existing tenants, let alone bad ones, is a tough sell for most buyers.

Today, we’re going to help you sell rental property with bad tenants by giving you 6 crucial tips. It may feel like you’re in over your head when you have bad tenants, but keep reading, and you’ll see that there are ways out.

1. Being Up Front With Everyone Involved

When you’re selling a house with tenants, whether they’re bad or good, you need to inform them of your intentions. No matter how much bad blood has cropped up between you and the tenant, you need to take the high road and give them all of the information they need to decide what’s best for them.

At the same time, it’s important to be upfront with all potential buyers about the circumstances of the sale. Whoever ends up buying the home will need to adhere to the terms of the lease agreement that you and the existing tenant have signed.

Thus, if your tenant decides to stay and see out the entirety of their rental term, the buyer has to allow it. Once the lease is up, the buyer can do whatever they please with the property. They may have to wait up to a year for the lease to finish, however, which isn’t a great selling point.

Being communicative throughout the process will ensure you don’t get into any hairy situations. Keeping everything above board won’t help you sell the house faster or please your bad tenant, but it’ll keep you out of trouble.

2. Understanding Tenant’s Legal Rights

Before you list the home, take the time to learn more about your tenant’s legal rights. If you move forward without an understanding of the due diligence you need to give to your tenant, it could result in serious legal ramifications.

No matter how difficult your tenant has been, they’re protected under various tenant laws. You can’t simply sell the house and throw them out on the street to figure things out for themselves.

Not only is your tenant entitled to finish out their lease with the new owner, but there can’t be any adjustments to the rental agreement. The new owner can’t come in and increase the rent or make drastic changes to the living conditions in an effort to get rid of the tenant.

As you start showing the home to potential buyers, your tenant is entitled to reasonable notice before anyone enters. This is usually 24-48 hours beforehand and they also need notice when you need them to vacate the property. All appointments should be scheduled at reasonable hours as well.

3. Learn About Capital Gains Taxes

One of the financial implications of selling a rental property is the taxes you pay on any net proceeds. When you sell your primary residence, any financial gains you make go untaxed, but this isn’t the case when your property is an investment.

Depending on how long you’ve had your rental property, there’s a pretty good chance it’s increased in value. You’ll have to pay capital gains taxes as a result, which may be anywhere between 10-37% for short-term investments and 15-20% for long-term investments.

There’s one way to avoid having to pay these taxes, which is to reinvest your money into a different rental property. The 1031 exchange allows you to essentially defer capital gains taxes until you sell again down the road.

4. Resolve Tenant Issues

If your bad tenant has any particular lease violations, it’s good practice to resolve them before the property changes hands. In particular, unpaid rent can hold up a potential sale, so it’s good to make sure your tenant is paid up before you even list the home.

This is yet another reason to relay information to your tenants as soon as you have it. Give them as much time as possible to resolve their lease violations so that you can go through with a seamless transaction.

You can also put out other olive branches to keep your tenant from derailing the process. One thing you can do is adjust the rent before selling the home to make things more comfortable for the tenant.

5. Evict the Tenant

When you have serious and unresolvable issues with a tenant, you can make moves to evict them before trying to sell. Evicting a tenant can be a time-consuming endeavor, which is likely why you’re trying to sell the property with a bad tenant in it.

That said, it may be worth talking to a lawyer to discuss your eviction options. If it’s an open and shut case, you may be able to evict the bad tenant in a matter of a few months and make the selling of the home a little more straightforward.

6. Sell to a Cash Buyer

The best thing you can do when trying to sell a rental property with a bad tenant is to sell to a cash buyer. Property investors, like, come to the table with a cash offer and little concern for the condition of the home or the undesirability of the existing tenant.

What’s so great about taking this route is the fact that the process can be over quickly. The cash buyer won’t have any issues with the existing tenant because they have the experience and knowledge to handle bad tenants accordingly.

To learn more about the process and get a free no-obligation offer, don’t hesitate to contact us. We’re confident we can extricate you from this unfortunate situation with your bad tenant.

Sell a House with Bad Tenants

Properties with bad tenants can feel like worthless investments, but when you follow these tips, you can sell a house with bad tenants relatively easily. The one surefire way to do it is to sell to a cash buyer.

At, we’ve helped countless property owners out of adverse situations like probate, foreclosure, and of course, bad tenancy. Get your offer today and turn this unfortunate circumstance into a profitable one.

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