Selling my house with a tenant

[Sanbenito1]

I recently moved out of my house (CA) into a new house in another town, and I am renting out my former house. The tenant knew going in that I was going to sell it likely at the end of his one-year lease (April 2024), but due to family circumstances I may need to sell it this year. Has anyone ever sold their house when they have a tenant with a valid lease already living in it?, and if so, is there anything in particular to be aware of? My house is likely a tear down because of its 900 sf size and age, and my hope would be that the new owner would appreciate having a tenant living in it and paying rent while they prepare to renovate or replace it.

 

[Sunset]

Tenant might not let anyone inside to view. What does your lease say about viewing and tours ?

 

[calmloki]

You need to read up on California landlord/tenant law. If you sell before the end of the lease you may run into some distasteful relocation charges the tenant may be entitled too.
Per these guys:
"As a landlord, you do not have a right to break a tenant’s twelve-month lease early. If you’re looking to sell the unit or move back into it, you’ll have to wait until the lease term has expired to do so. The only exception to this rule is if the renter refuses to pay rental payments or violates the lease. If this is the case, as the landlord, you’ll want to begin the legal eviction procedure to remove them from your unit".
https://www.eastbaypmc.com/breaking-a-lease-california/

We're selling a full triplex in Oregon and hope a buyer wants the tenants also, but if you have a teardown the buyer may not be enthused about taking on the tenant..

 

[LateToFIRE]

Depends on the buyer - if buyer is looking to use the property for income, then having a tenant in place is a positive (assuming rent is at or near market rate). Otherwise, most buyers are not going to want the hassle of potentially having to evict a tenant, and this risk will be reflected in bid prices.

 

[Aerides]

From watching my local market, existing rentals sell great to landlords, but not to other buyers.

Your tenant won't have to cooperate properly with showings the way you would.

Have you considered buying the tenant out? In most areas, tear down or not, property values are up. Throwing money at a problem often works.