As a property owner, you may be looking to sell your rental unit.

Generally, the ideal time to sell your real estate investment is when the property is vacant. But, if, for whatever reason, you want to sell it immediately and your rental is occupied, you do have a few options.

In this post, the team at Paramount Management & Realty will provide you with an overview of the options available to you and how you can make the process as easy as possible for every party involved.

The Complexity of Selling an Occupied Space

More often than not, when a property owner wants to sell their unit, they will find a potential buyer while the property is occupied by a tenant.

However, this comes with a number of challenges.

Here are some of these challenges:

1. Legal Provisions

A lease agreement defines a tenant and landlord's obligations, as well as their responsibilities. The potential buyer would wish to move in once they acquire the property, but the lease agreement in place might give the tenant an overriding interest.

The lease allows them to occupy the space until a certain date. We recommend that the lease agreement in place is always in your interest and that you understand State property laws.


2. Level of Cooperation

If a tenant decides to be uncooperative, it can be hard to convince your buyer of the allure of your property.

3. Uncertainty

There are multiple variables to consider, including the design of the lease agreement, the state of the market, the willingness of the tenant and more. This means that you should always be willing to adapt to the situation at hand.

Dealing with a Stubborn Tenant who Doesn't Want to Leave

It is always possible to have a tenant on your property who refuses to leave, even with a potential buyer looking to close the deal.

When this happens, here are some of your options:

1. A Sale to the Tenant

It could be that the tenant loves the location of the property, and its fittings and amenities. Perhaps the idea of packing up their belongings and moving to a new area doesn't sit well with them.

It could be to your benefit and theirs if they can place an offer for the property.

family in a rental home with moving boxes

2. Consider a Buyout

Consider offering your tenant some financial incentive to terminate the lease agreement before the due date. The amount that you offer will be dependent on some factors, such as the length of the lease and the condition of the unit.

3. Sell to Another Property Investor

If all else fails, think of approaching investors who are looking to get into the market. You have been enjoying rental income from the property for a number of years. Provided that market conditions are still favorable, you should be able to entice a new buyer by leveraging on the rent potential.

You might be able to sell the property with a tenant in place. Actually, this situation is advantageous as it displays its demand by the current tenant pool.

Tips to Make the Transition Easier

It might be that you have your vision set on leaving the local property market after a certain number of years.

If that is the case, have a look at the tips that we offer below to help you sell the rental property even when a tenant is occupying it.

  • Timing. As we mentioned above, there might be legal provisions that limit how easily you can sell your property since the tenant is the legal occupier until the end of the lease. We recommend that you time the end of the lease with the cycle of the property market. This allows the property to enter the market at just the right time.
  • Work with a property service provider. With an experienced property management company handling all the issues, they can assist you to execute the sale smoothly.
  • Have a lawyer at hand. If a tenant decides to go to court, it will be to your advantage to have someone in your corner who knows property law inside and out.

man holding a toy house


With the tips offered above, you can easily navigate such a scenario should it present itself.

This is just the tip of the iceberg when it comes to tenant management.

If your rental property is located in Arizona, rely on the #1 property service providers in the area: Paramount Property Management and Realty.

As members of the National Association of Real Property Managers and Arizona Realtors, we are trusted by dozens of property owners in the region. Our quality of service, integrity, and professionalism are second to none.

Get in touch with us today and receive a quote for our property management services.