Hands On Real Estate Investing

We have a large 4 bedroom 3.2 bath brick townhouse that is the crown of our rental properties. We decided to sell the property during the pandemic to get the highest price possible. However, in our state, tenants have the right to purchase the rental property first. Bummer! We were really looking forward to getting our gorgeous property back after 5 years, making upgrades, and putting it on the market! When we gave the tenants 60-days notice, they balked. We had our real estate agent take a look at the property so he could give us an idea of how much it’s worth. Fortunately, our agent has a very charming personality, so the tenants were very welcoming to him. He took a look at all of the rooms and he made a deal with them. If they decided they wanted to make an offer on the property and not use their real estate agent, he would only charge us (the seller) 3% broker fee instead of the usual 6% broker fee if the buyer has a real estate agent. Our agent would prepare the contract, the buyer would apply for mortgage financing, and 30 days later, we close the deal at settlement!

We usually spend $10k to make upgrades and prepare a rental property for sale. Carpeting and flooring is usually about $3,500 and painting is usually $2,500 – $3,500. New kitchen countertops and stainless steel appliances is another $3,500 bucks. We saved that $10k by selling the townhouse to the tenant in AS-IS condition! Our real estate agent estimated that the full market value of the townhouse is $330k – $340k, and we sold the townhouse to the tenant for $327k, with no seller assistance to help the buyer with closing costs. We liked the deal and the tenant liked the deal. They lived in the house for 5 years, raising their young family. They loved the schools and neighborhood, so it’s WIN-WIN deal for everyone!

If you own a rental property and you’re thinking about selling, save yourself some trouble and make a deal with the tenant! Offer to sell to them at a reduced price and see what happens …

Have you ever sold a rental property to your tenant? If so, please share your experience below:

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The opinions expressed herein are solely those of the Author/WebMaster. Before taking any action, please consult your real estate, financial, and legal advisors.