How to Sell Your San Diego Rental Property While It’s Tenant Occupied

What happens if you need to sell your tenant occupied property? Owners sometimes call for help because they need to sell fast, and a tenant is in place. When this happens, you need to understand a few things.

Refer to Your Lease Agreement

Fixed term leases cannot be canceled unilaterally. So, if you have a tenant with a one-year lease and you want to cancel that lease to sell your property, just be open. Explain to the tenant that something happened and you need to sell, but you don’t want to inconvenience them with showings. Ask if they would be interested in ending the lease early. If they say no, try to incentivize them. Offer to give the deposit back as soon as you get the keys back as long as the home is left clean. Or, offer them cash. I’ve seen thousands of dollars offered to tenants from owners who were motivated to terminate their lease.

Most leases have a clause that allows the property to be shown to potential buyers. So, if the tenant is going to stay in the property while you’re selling it, you can work with them to schedule showings. Also, the lease and security deposit would to transfer to the new owner after you sell. Everything would remain the same for your tenant.

Selling a Vacant Home is Better than Selling an Occupied Home

While the home can be sold while occupied, it’s almost never the right approach. Here’s why:

Owner occupants always pay more than investors. If you’re an owner occupant and you need a loan from the bank, the bank will require you to move in within a certain period after closing, usually 30 to 60 days. If your tenant is six months into a 12 month lease, an owner occupant will not be able to purchase your property. Your pool of potential buyers goes way down. You won’t get close to what you would get during a normal sale if the property was vacant.


You want a vacant property that’s repaired, cleaned and professionally staged before you go to market. The professionals know this, and it’s why they stage their homes. When it shows better, you get more money. Sometimes owners want to sell with a tenant there because they need that cash. But, if you can get through that crunch of two to three months while you’re selling, you’ll get a big payday at the end. The home will sell for more money. With a tenant there, the home can look dirty and lived in. It’s hard for buyers to imagine themselves living there.


The property can be shown more often when it’s vacant. You open it up to more buyers because you don’t have to work around tenant move out dates.


If you do need to sell in the future, you can let your tenants go month to month. But remember the laws in California. If they have lived there for a year or more, you have to give them 60 days before you terminate the lease. If they have lived there for less than a year, a 30 day notice is sufficient.


If you have any questions about this, please reach out to us at Good Life Property Management. We’d love to help you.


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