Should I Evict My Tenants or Sell?

As a landlord with tenants, the decision to sell your house comes with a whole bunch of ramifications that general homeowners never need to consider — should you evict your tenants before selling or sell with tenants? When answering this much-debated question, it's important to consider your needs, the state law, and the tenant's rights as set out by the lease or rental agreement. A complicated process, but one we're about to help you think through.

We'll cover the legalities of eviction and selling, whether it's best to evict before trying to sell, and what to do if your tenants harm your selling chances.

The Legalities of Eviction and Selling

Let's cut straight to the point — you may not have the right to evict your tenant at all. Assuming they want to stay, you might have to sell your home as-is with the tenant living there. To find out for sure, begin by reviewing the lease agreement. It should contain information about how much notice you need to give your tenant about the possibility of a sale and eviction. Typically, it's 30 or 60 days.

After that, you might have to contend with state or local laws restricting your ability to evict for a home sale if the tenant hasn't done anything to justify ending the lease. Depending on your city, you must have "just cause" for evicting somebody, regardless of your rental agreement. If the tenant stops paying, at a certain point, they will be considered a squatter. Review the squatting laws to determine what next steps you should take as a landlord. The allowed timeline for ejecting a squatter with vary depending on your local real estate laws and jurisdiction.

Should You Evict Tenants Before Selling?

You'll find it easy to answer this question once you've justified the legal side of things. Often, state laws give tenants the right to remain in your rental property after the sale until your lease agreement expires. Therefore, you don't need to evict tenants before selling, provided the new owners understand that the property comes with tenants.

Typically, real estate investors are happy to purchase homes with existing tenants who make timely rent repayments. Finding investment properties that are vacant is ideal for investors but not a complete deal breaker. Even people looking to reside in the property themselves are satisfied with tenants if their agreements expire shortly after the sale. However, the characteristics of your tenant play a role. If they're untidy, aren't communicative, or are just all-around difficult, your chances of selling dwindle.

What to Do If Having Tenants Would Hurt Your Selling Chances

This leads us nicely to the final part — what to do if your tenants impact the likelihood of a sale. 

Luckily, with month-to-month tenants, it's not that difficult. All you need to do is end the tenancy by sending your state-required notice. With long-term leases, however, it isn't as simple. Your best option? Negotiate! A common approach is to offer money in return for their early departure. If they agree, you can sell your property as "vacant upon closing" or schedule their move-out date in time for you to stage the home for showings.