Selling a house is already a complex process, but selling a home with tenants in place adds an extra layer of challenges. Spokane homeowners who own rental properties may find themselves in a position where they need to sell but aren’t sure how to navigate the process with tenants still living in the home.
From understanding tenant rights to determining the best way to market the property, it’s important to approach the sale strategically. In this guide, we’ll walk you through the considerations, marketing strategies, and best practices for selling a tenant-occupied house in Spokane. However, since real estate laws vary, always consult a real estate attorney before making any legal decisions.
Can You Sell a Tenant-Occupied House in Spokane?
Yes, you can sell a house with tenants in Spokane, but there are a few factors to consider. The terms of the existing lease will determine how the sale can proceed:
Month-to-month leases: These are the easiest situations to navigate. You must provide proper notice before terminating the lease.
Fixed-term leases: If the tenant has a lease with months left on it, the new buyer must honor the existing lease unless other arrangements are made.
It’s crucial to review Spokane’s landlord-tenant laws to ensure compliance when selling a rental property. A real estate attorney can help clarify your rights and responsibilities.
The Best Strategies to Sell a Rental Property with Tenants
Selling with Tenants in Place vs. Asking Them to Move
One of the first decisions you’ll need to make is whether to sell the home with tenants still occupying it or to wait until it’s vacant.
Selling with tenants in place: Attracts investors who want an income-producing property.
Selling vacant: Makes it easier for traditional buyers who plan to live in the home.
Communicating with Tenants About the Sale
Tenants may feel uncertain when they learn their home is being sold. Open and honest communication is key. Let them know your plans as early as possible and be transparent about their options.
Spokane Landlord-Tenant Laws You Need to Know
Washington has strong tenant protection laws, so homeowners need to follow proper procedures.
Notice for showings: Landlords must provide at least 24 hours’ notice before entering the property for showings.
Notice to vacate: For month-to-month leases, you must provide at least 20 days’ written notice.
Eviction restrictions: You cannot evict a tenant simply because you want to sell—Washington law requires just cause for eviction.
Since real estate laws change, consulting a real estate attorney is highly recommended to ensure you follow all regulations correctly.
How to Market a Tenant-Occupied Home for Sale
Targeting Spokane Real Estate Investors
Many investors prefer purchasing tenant-occupied properties since they come with built-in rental income. If your home is already generating consistent rental payments, market it as a turn-key investment opportunity.
Highlighting Rental Income for Buyers
Provide details on current rent rates, lease terms, and any rental history that shows consistent payments. Investors will be more interested if they can see the financial benefits upfront.
Working with a Spokane Realtor Who Knows Rental Sales
Hiring an experienced Spokane realtor familiar with rental property sales will make the process smoother. They can connect you with the right buyers and market the home effectively.
How to Handle Showings with Tenants
Showings can be a tricky part of selling a tenant-occupied house.
Give proper notice: Washington law requires 24-hour notice before entering.
Schedule conveniently: Try to schedule showings at times that are least disruptive to the tenant.
Keep the property presentable: Work with tenants to ensure the home is tidy for showings.
Selling to a Cash Buyer vs. Listing on the Market
Selling to a cash buyer is often the fastest way to offload a tenant-occupied property, especially if you’re dealing with uncooperative tenants or lease complications.
Pros of Selling to a Cash Buyer
No need for tenant showings.
Faster closing process.
No need for repairs or staging.
Pros of Listing on the Market
Potential for a higher sale price.
More buyers to choose from.
Opportunity to market to both investors and homebuyers.
Navigating Lease Agreements in a Home Sale
If your home has a fixed-term lease, the new buyer must honor it unless other arrangements are made. If the buyer wants the property vacant, you may need to negotiate with the tenant for an early termination or cash for keys arrangement.
Since lease laws can be complex, it’s best to consult a real estate attorney before making decisions that could affect tenant rights.
How to Price a Tenant-Occupied Property in Spokane
Pricing a rental home differs from pricing an owner-occupied home. Investors consider factors such as:
Rental income potential
Tenant lease terms
Property condition
A realtor with experience in investment properties can help price your home competitively.
Tax Implications of Selling a Rental Property
Selling a rental property has tax implications that homeowners should be aware of:
Capital gains tax: If you’ve owned the home for more than a year, you may owe taxes on any profit from the sale.
1031 exchange: If you reinvest proceeds into another rental property, you may defer capital gains taxes.
Depreciation recapture: If you’ve claimed depreciation on the property, you may need to pay taxes on it when selling.
A tax professional can help you understand the financial impact of your sale.
Final Steps to Close the Sale Smoothly
To ensure a hassle-free closing process:
Provide lease agreements to the buyer.
Transfer security deposits properly.
Ensure legal compliance with tenant notices and rights.
FAQs About Selling a House with Tenants in Spokane
Can I sell if my tenant refuses to leave? Yes, but the lease agreement remains in effect. You may need to negotiate a move-out or sell to an investor willing to keep the tenant.
How much notice do I need to give my tenant? For a month-to-month lease, at least 20 days’ notice is required in Washington. Fixed-term leases must be honored unless legally terminated.
Is it better to sell vacant or with tenants in place? It depends. Selling with tenants appeals to investors and continues cash flow, while selling vacant may attract allow for easier access and a quicker sale.
Conclusion
Selling a tenant-occupied house in Spokane requires careful planning and legal awareness. By understanding lease agreements, tenant rights, and buyer preferences, you can navigate the process smoothly.
For expert guidance, work with a Spokane realtor who understands investment property sales. If you’re considering selling your rental home, reach out for a free consultation to explore your best options.
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About Me
My name is Nick Briggs
Being born and raised in Spokane I grew up knowing what a special place this city is, and it was my dream to help others create a life in this wonderful community by guiding them in real estate. I spent many years in the customer service industry, the experience of listening and communication showed me how much I truly loved helping people. I attended Gonzaga University and earned a Bachelor’s Degree in Business Administration to add to my knowledge of guiding, managing, negotiating, and listening to individuals, helping them achieve their real estate goals.
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