Are you tired of being a landlord? Have you inherited difficult tenants? Learning how to sell a Maryland property with tenants can be a daunting task for many landlords. 

This is primarily due to the additional legal hassles and paperwork involved. There is more going on when you need to sell rental property with tenants compared to selling an unoccupied house.

Read on to find out how to sell your occupied rental in Maryland and get fast cash for your rental home!

tenant occupied house in Maryland

Disclaimer: This blog post and website provides general information on Maryland real estate. Maryland Estates, LLC, doing business as Creo Home Buyers, and its authors are not liable for the accuracy or use of this information; consult with a trusted real estate professional or attorney for guidance regarding your unique selling situation.

Can You Legally Sell an Occupied Rental Property?

The short answer is yes, you can legally sell a rental property with tenants in Maryland. Though, it is important to understand what happens to your tenants when you decide to sell your investment.

The lease agreement plays an important role in determining your rights and obligations as a landlord. The lease agreement outlines expectations for both the landlord and the renters during your home sale process. Be sure to comply with state-wide and local rental housing laws. You want to avoid time-consuming and costly lawsuits when selling. This is especially true in process of selling a rental in tenant-friendly cities such as when selling rentals in Baltimore.

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What Happens to Tenants When Selling Rental Property?

When selling a rental home, you must take the tenants’ rights into consideration. The new owner of the property will have to honor the lease or rental agreement that is already in place. If the next property owner wants to make changes, they will need to wait for the lease currently in place to expire first.

If the agreement is a month-to-month lease, the new owner can choose to terminate the lease with proper notice, usually 30 days in advance. But for a fixed-term lease that will not be the case. The new owner will have to wait for the fixed-term lease to expire before deciding if they want to renew with the same tenants or other terms, such as the rental rate or length of lease.

How to Sell a House with Tenants in Maryland

Selling an occupied rental property in Maryland poses unique challenges and legalities. Landlords looking to sell their tenant-occupied property will need to do their homework.

Prepare Your Rental Property for Sale

When preparing your rental property for sale, effective communication with tenants is key. Let them know about your intention to sell according to Maryland law and the lease agreement.

Make repairs and necessary improvements to help attract potential buyers. If possible, work with your tenant to stage the home to make it more appealing.

Price and Market Your Rented House

Look at the current market conditions and set an attractive price. You want to attract and entice those investor buyers. Don’t price yourself out of the market.

Work with an experienced real estate agent that understands property investors. They can help you create an effective marketing strategy to reach the right buyers. However, you can certainly sell your property yourself to save on commissions.

Negotiate and Showing with Potential Buyers

Consider adding an addendum to the existing lease during the negotiation process. This will help to address any concerns that may arise head on. Coordinating showings and inspections with tenants is essential. Keeping organized and open communication helps to ensure a smooth home sale.

Handling offers and counteroffers requires careful consideration to protect your interests. It also accommodates the needs of potential buyers and those of your tenants.

Finalize the Sale and Transition Tenants

Finalizing the sale and transitioning tenants can be an involved process. You will need to prepare for the settlement and getting your ducks in a row. It is also important to provide tenants with notice to vacate if necessary.

If your tenants are planning to move you might want to consider helping them. Assisting them with relocation options can help make the process easier for all.

Follow current landlord and tenant housing laws. Failing to do so can result in costly legal battles when selling your rental home. Here are some tips for when you want to sell an investment property with tenants in Maryland:

  1. Understand your legal rights and obligations as a landlord. This will ensure you are acting within the confines of state and local laws.
  2. Let your tenants know about your intention to sell. It is good practice to let your tenants know in advance of your intent to sell. This will allow your occupants time to prepare for the impending sale. Giving them the time needed to adjust or make arrangements for their future housing, taking into account property taxes and the benefits of working with a real estate professional if they decide to buy the property.
  3. Provide First Right of Refusal – offer your tenant the opportunity to buy before anyone else. This can eliminate the need for finding a buyer and make the process of selling your investment property easier. Depending on local laws you might be required to offer first right of refusal to your tenants. This is true of rental properties located in Baltimore City or the City of Takoma in Montgomery County.

Challenges of Selling a Rented House in Maryland

sign to sell occupied rental property

Before you sell your property with tenants it is important to be aware of the challenges. There are legal rights and obligations to be aware of as a landlord so you can be better prepared.

  1. More difficult to find a buyer. Most home buyers are looking for a move-in ready home and not one that is already occupied, emphasizing the appeal of a vacant property. Additionally, some real estate investors don’t like taking on existing tenants. This is especially true if your tenants have a bad rental payment history or are causing issues at the property.
  2. Lower sale price. Most cash buyers are not looking to purchase residential property with people already living it. This means that buyers interested in occupied properties are looking for a good deal or one that will make a good return on their investment. Therefore, they are not likely to be looking to pay top dollar.
  3. Showings with tenants. Unless you plan to sell the house for pennies on the dollar, it will be hard to find a buyer who will buy sight unseen. You will need to give your tenant enough notice for showings and walkthroughs.
  4. Uncooperative tenants. Difficult renters can make potential buyers uneasy and less interested in purchasing the property. Investment house buyers might get worried about potential future problems or hassles with the tenants.
  5. Completing repairs. It’s also hard to perform renovations when people are living in the house. The challenge is to find the right time to do the work without inconveniencing the tenants too much.
  6. Property condition and appearance. Buyers care about how the property looks and feels. You want to make sure that your property is clean, attractive, and well-kept to maximize cash flow. But this can be hard when you have tenants who may not cooperate or care. You also have to respect your tenant’s privacy and quiet time, so scheduling repairs and maintenance can be tricky.

Most landlords can navigate this process successfully. This is either on their own or with the help of a real estate agent. Understanding the challenges involved and following housing laws can make it easier to sell your rental property. 

Should You Sell Your Tenant Occupied Property?

Deciding whether to sell your tenant occupied property is a personal choice. Many factors, including advice from a real estate attorney, can come into play and your specific circumstances play a huge part.

Selling the rental property with existing tenants AS-IS may be the best option. Especially if you need to sell quickly, the property has deferred maintenance, or if you no longer wish to be a landlord.

There is one benefit to selling a rented house with tenants that many people don’t think of at first. If your tenants are paying, the property will continue to generate rental income and cash flow while the property is on the market.

If you have good tenants in place it may be worth keeping the property longer as an investment. This is if you are generating a steady rental income and the numbers are working in your favor.

Weigh the pros and cons and decide what is best for you and your situation. Consult with a real estate agent or other professional that works with rental investors to help you make the right choice.

Options for Selling a Tenant-Occupied House in Maryland

Once you have decided to sell your house with tenants, there are a few options available to you:

  1. Sell AS-IS with tenants. Having tenants in place can attract buyers looking for a turn-key investment property. Though, your total interested buyer pool will be smaller.
  2. Wait until lease expires. This will allow you to sell the property without any tenants in place. If the tenants still have several months left on their lease and you need to sell quickly, this isn’t an option.
  3. Offer cash for keys. You could possibly end the lease early so you can sell an unoccupied rental. Some landlords offer their tenants money to break the lease and move out early. You will need to check with your local housing laws to make sure you are compliant before offering this option.
  4. Sell to current tenant. Your current tenant may be interested in buying the house. If they are, this avoids the trouble of finding a buyer and convincing your tenant to break the lease. 

Selling a rented home with tenants in Maryland requires careful planning and consideration. You also need to follow all applicable local and state laws, no matter which option you choose.

Sell Your Occupied Rental Property for Fast Cash in MD

Have you decided to sell your rented house in Maryland? If so and you want to skip the usually complications of a selling on-market, consider a off-market sale by selling to an investor directly. Professional house-buying company Creo Home Buyers in Maryland is here to meet those needs.

We offer cash for houses in MD with tenants and offer a (mostly) hassle-free selling experience – as every tenant occupied property comes with some hassle. And we are quick, offering a streamlined way to sell your home. We understand the challenges that come with selling a Maryland rental and are here to help. We work to ensure you receive a fair home offer for cash or terms, so you can sell your rental property quickly.

Say goodbye to the headaches of being a landlord and sell your occupied rental fast. The process is easy with Creo Home Buyers. Request a free all-cash offer for your rented home in Maryland today!

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