Author Topic: Selling rental to renters  (Read 1230 times)

SamIAm38

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Selling rental to renters
« on: September 20, 2016, 03:39:27 AM »
Hi all,

So I moved away from my home in south florida. I wanted to try to rent the house for a year and see if it could prove to be profitable. Well the house insurance is up $1500 from where it was before due to my previous policy not allowing renters, dog breed restrictions, and issues  with my wind mitigation. Now i'm not making a reliable profit and the market is good so i'm cutting my loses and selling.

Now I'm trying to sell my house to the current renters, but we have a lease in place and the property is managed by a third party property management company. So far the renters have been playing games with the price so nothing is set in stone, but if they do provide a good offer and purchase the house, what can I do with the lease agreement and property management? Try to term or sign the paperwork so that the renters take ownership the day after the lease is over? Should I offer to pay the property management fees for the rest of the lease out right? I'm thinking the property management company will not like this situation, especially because they are also a realty office and were thinking they would sell the house when the time came to.

Thanks for the suggestions!

arebelspy

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Re: Selling rental to renters
« Reply #1 on: September 20, 2016, 04:20:03 AM »
Have you looked at your property management agreement?  Likely they get a cut if they placed those tenants (even if they don't negotiate/sell it themselves).  That's fairly standard in a lot of PM agreements, though it may not be in yours.  Worth looking into.
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Ensign1999

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Re: Selling rental to renters
« Reply #2 on: September 20, 2016, 10:20:59 AM »
Have you looked at your property management agreement?  Likely they get a cut if they placed those tenants (even if they don't negotiate/sell it themselves).  That's fairly standard in a lot of PM agreements, though it may not be in yours.  Worth looking into.

+1 for Arebelpy's comment.  You need to look at your PM agreement.  It should have a term in for how long they are your PM.  After that you could tell them you are going to manage it yourself and then sell to the renters using a lawyer to draw up the documents to avoid agents.

I'm in a similar situation in that I have great renters and I've recently moved back within driving distance of the rental.  The combination of having great tenants and being close have nullified the benefits of having a PM.  We have thought about selling to these renters at some point, but we would wait until we are not under an agreement with the PM where they get a cut.

arebelspy

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Re: Selling rental to renters
« Reply #3 on: September 20, 2016, 03:33:12 PM »
Have you looked at your property management agreement?  Likely they get a cut if they placed those tenants (even if they don't negotiate/sell it themselves).  That's fairly standard in a lot of PM agreements, though it may not be in yours.  Worth looking into.

+1 for Arebelpy's comment.  You need to look at your PM agreement.  It should have a term in for how long they are your PM.  After that you could tell them you are going to manage it yourself and then sell to the renters using a lawyer to draw up the documents to avoid agents.

I'm in a similar situation in that I have great renters and I've recently moved back within driving distance of the rental.  The combination of having great tenants and being close have nullified the benefits of having a PM.  We have thought about selling to these renters at some point, but we would wait until we are not under an agreement with the PM where they get a cut.
Many agreements have that they get a cut even if they are no longer managing, if they placed the tenant.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.