By Stephen McCarthy
When it comes to income properties it is fairly common for a building to sell with tenants in place.
The purchasers of the property will want to review all lease and tenancy agreements. In commercial transactions the sales value is based in part if not completely on the value of the existing lease agreements and the income they produce.
Now you might be the owner of a single income property. There are many people who own just a single unit a condo they have been renting out and now want to sell that unit.
The value of a single condo is most likely based on comparable sales rather than the rental income it produces.
However any lease agreement still carries over to the new owner.
So if you are selling your condo and have a lease agreement in place you need to understand the terms and honor your side of the lease.
If you want to sell in April but the lease ends in August that means the Lessee/tenant can stay until August.
Since most buyers do not want a tenant you might consider asking the occupant if they want to break the lease early and move out early.
Ideally you want to sell this type of property free of any tenant issues but often this is unavoidable.
Of course you can wait until the end of the lease but that might not be the best time of year to sell or meet your timeline.
You can sell now with the tenant and the lease agreement. You should have the written agreement and rental history ready for a potential buyer to review.
You will need to show the apartment with the place occupied. You should consider how the tenant has the place set up. Do they keep the place looking nice and showable? Depending on how they keep the place will influence whether you wait to start showings.
Also you need to consider the sale process is disruptive for any of the current residents. You will need to have access for photography, showings, inspections, etc and will need some level of cooperation from the tenant.
Even the most cooperative tenant can lose their patience when they are being asked repeatedly to make their home available. Especially if they are unhappy about the sale.
So you can absolutely sell with a tenant in place however you need to evaluate the any existing tenancy agreement, rental income, apartment condition and timing prior to listing your place for sale.
