How To Sell Your House With Tenants in Minnesota

Do you need to sell a house that has tenants in it?

Maybe you own a rental property in the Twin Cities that isn't making you money anymore. Maybe you're tired of tenant turnover, late rent and 2 a.m. calls about the furnace. Or maybe you inherited a house that came with a tenant already in it.

There are a lot of reasons to sell a rental. But selling a house with a tenant living in it can be a lot harder than a normal sale. Here's what to expect, and some tips to make it go smoother.

First, understand your tenant's rights

Your tenant has rights, and selling the house doesn't erase them.

• The lease comes with the house. In most cases, if your tenant has a lease, the new owner takes over that lease. A sale usually doesn't end it. The tenant gets to stay until the lease is up, as long as they keep following it.
• Month-to-month is different. If your tenant is month-to-month, you can usually end the tenancy with proper written notice. Minnesota has specific rules about how much notice you need to give, so check them (or ask an attorney) before you send anything.
• You have to give notice to come in. Minnesota law requires landlords to make a good-faith effort to give at least 24 hours' notice before entering, with a time or time window, and to come in only between 8 a.m. and 8 p.m. unless the tenant agrees otherwise. That applies to showings too.
• The security deposit has to be handled right. When the house sells, the deposit needs to be either transferred to the new owner or returned to the tenant according to Minnesota law. Make sure it's part of the closing.

And if your house is in Minneapolis or another city with rental licensing, keep in mind the new owner will usually need to get their own rental license.

Wait until the lease is up?

Take a look at how long your tenant has left on the lease. If it's only a couple of months and you can wait, it might be easiest to sell after they move out. Once the lease is up you can let them know your plans, or let them go month to month while you get the house ready.

If you're writing new leases, think about what you might want down the road. Talk to an attorney about what's allowed in a Minnesota lease if you think you may want to sell.

Think about how your tenant will react

Only you know your relationship with your tenant. Do you think they'll be willing to help, or will they be upset?

A great tenant will keep things clean and be flexible about showings. An unhappy tenant can make things really hard. A messy house during showings, or a tenant telling buyers about everything that's wrong with the place, can scare buyers away fast.

Put yourself in their shoes. Nobody likes feeling uncertain about the place they live. Keep them in the loop about when the house will be shown, how much notice you'll give, and what you expect.

Make it worth their while

If you're going to list the house with an agent while the tenant lives there, you're asking a lot of them. Offer something in return:

• A rent discount while the house is on the market
• Paying for a cleaning service before showings
• Help with moving costs or a deposit on their next place
• A great reference for their next landlord

Find out if your tenant wants to buy

They already live there, so no moving is involved! If they're happy in the house, they might want to buy it themselves. If they can't get a bank loan right away and you own the house free and clear, owner financing (or a contract for deed) could be an option until they can refinance. Just make sure you understand the rules first.

Sell your house directly

The easiest way to sell a house with tenants is usually to sell it directly to an investor who's happy to keep the tenant in place.

When you sell to Trademark Properties:

• We'll buy the house with the tenant living in it.
• In most cases the lease stays in place and your tenant isn't disturbed. The only change for them is where to send the rent check.
• No showings, so no fighting over access, cleaning and scheduling.
• We buy as-is. No repairs, no commissions, and we pay the closing costs.
• You pick the closing date.

A lot of investors actually like having a good tenant already in place. It saves them the time and money of finding and screening a new one.

We're not attorneys and this isn't legal advice. Minnesota landlord-tenant law has a lot of specific rules (and some cities have their own on top of that), so talk with an attorney before you end a lease or sell a rental.

Want to sell your house with tenants in the Twin Cities? Give us a call at Call us or fill out the form. There's never any obligation!