Selling your house is stressful enough, but trying to sell a house with tenants presents even more of a challenge. Let’s discuss five steps for selling your house with renters in Toronto.
Step #1: Talk to the Tenants
The first step should always be to speak with your tenants, notify them of your intention to sell the property and even give them the opportunity to purchase it themselves. Perhaps the tenants have been renting the property for a few years and have fallen in love with the property or really like the school district for their children. They may feel attached to the neighbourhood and prefer to live there permanently. Have the tenants meet with their bank or mortgage broker to obtain financing for the property and then you can negotiate the purchase contract. This option presents a smooth and easy transaction, and no need to pay realtor fees.
Step #2: Review Your Lease
Another important step to remember early in the selling process is to review the lease you have in place with the current tenants. In Ontario, if your tenants are on a fixed term lease such as 1 year, the new buyer must assume the lease for the duration of the 1 year agreement regardless of whether they are planning to move in themselves. This may deter potential buyers when listing your property. If, on the other hand, your tenants are on a month-to-month lease, a new buyer has the option to either continue to rent or give them 60 days notice in the event the buyer is moving in.
Step #3: Wait for Expiration
One of the simplest options for selling your house with tenants in Toronto would be to let the current lease expire and to not renew it. You can then ask them to move out and indicate you will be selling the property. They may be accommodating or alternatively will remain on a month-to-month basis, which as discussed would mean the new buyer would have to give them 60 days notice to vacate. Remember, 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.
Step #4: List with Tenants in Place
If you are unable to wait for the lease to expire, the next step for selling your house with tenants in Toronto would be to list the house with tenants in place. This may actually attract certain buyers, especially investors looking for a turn key property with tenants already in place so they can begin collecting rent on day one. On the other hand, this could deter the majority of the buyers who are either looking to move in themselves or prefer to screen and choose their own tenants. In addition, the tenants may be upset that the house is being sold and might cause problems when the house is being shown. Be prepared that they could also cause damage to the property before they leave, especially if they are leaving on bad terms.
Step #5: Pay the Tenant
The fifth step for selling your house with tenants in Toronto would be to offer payment for them to vacate the property. This would help ensure the property is vacant for showing and not deter potential buyers. You could also pay them by offering a discounted rental rate for the remaining month or so before they vacate.
How You Can Avoid These 5 Steps!
If you need to sell a house with tenants in Toronto, the fastest, easiest, and most convenient way is to sell the house to a cash house buyer. This will eliminate property showings, dealing with upset tenants, and the costs of putting it on the MLS.