Should I sell my rental or keep it?
Selling a rental is different from selling a home, because tenants and city rules come along. Here is how to think it through before you decide.
The short answer
Keep the rental if it pays you steadily and you can handle the work. Sell it if it costs more time, money or stress than it is worth to you. There is no wrong answer, only an honest accounting of what the property takes from you each month.
If you do sell, you may not need to wait for the tenant to leave. A lease generally stays in place when the property sells, and the new owner becomes the landlord. Talk to an attorney about your lease.
Questions to ask yourself
Do repairs keep coming up? Is the rent covering taxes, insurance, repairs and the mortgage? Are you spending weekends on this? Would the money from a sale do more for you somewhere else?
Write the answers down. If the honest math says the house barely pays, selling can free up both cash and time.
Also think about the next few years. An older roof, furnace or water heater can mean a big bill soon. If you would rather not spend on those, a sale now may be easier than a sale after a surprise repair.
City rental rules
Many Twin Cities cities license rental properties and inspect them. In Minneapolis, for example, owners close their rental license when they sell, and they must tell the buyer in writing about open housing violations from the city. Other cities have different rules, and some licenses do not transfer to a new owner.
Call your city before you list or sign anything, so a license problem does not slow down your closing.
Ask the city what happens to open violations, since those usually have to be shared with a buyer.
Non-paying tenants
This is the biggest reason landlords call us. In Minnesota, removing a tenant takes a court process. A landlord cannot change the locks, remove belongings or shut off utilities to force someone out, and doing so can lead to penalties.
So the plan is not to push the tenant out yourself. Talk to an attorney about your lease, what you are owed, and whether to start a court case. A sale can often go forward with the tenant in place.
What tenants mean for a sale
A listing with tenants can be hard. Showings need notice, tenants may not keep the place showable, and many buyers want a vacant house. That is why selling to a buyer who takes the property with tenants in place can be easier.
Security deposits also need to be handled correctly at closing. Your attorney or title company can explain how.
Another thing to plan for is the condition of the unit. Tenants are not always careful, and the rent may not cover a big repair. If the house needs a lot of work and you would rather not do it, an as-is sale avoids that cost. Gather your lease, your rent records and any notices you have sent, so a buyer or attorney can see the full picture.
Where we fit
We buy rental houses with tenants in place, including ones with non-paying tenants. We do not ask you to repair, clean or stage, and there are no commissions or fees. After a walkthrough you get a fair written offer, and you pick the closing date. A title company closes it. We are not agents.
If keeping the rental makes more sense, we will say so. Call or text Papa Nick at (763) 878-7272 and we can talk through your numbers.
Common questions
Do tenants have to leave when I sell?
Generally no. A lease usually stays in place when a property sells, and the new owner becomes the landlord. Check your lease and talk to an attorney about your situation.
Can I sell if my tenant stopped paying?
Yes. The tenant does not have to leave beforehand. Removing a tenant in Minnesota takes a court process, and a landlord cannot lock them out. Talk to an attorney about what you are owed.
Do I need a rental license to sell?
It depends on your city. Many Twin Cities cities license rentals and have rules for closing or transferring the license at sale. Call the city office before you list.
Wondering what we would pay for yours?
Tell us where the house is. It costs nothing and you are never obligated to take the number.
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