Selling a Rental Property With Tenants in Place in Richmond and Henrico
Date Published
Being a landlord can wear you down: late rent, repair calls, turnover, and the occasional tenant who won’t leave. If you’re ready to sell a rental in Richmond or Henrico County but it’s occupied, you don’t necessarily have to wait for the lease to end.
This article is general information, not legal or tax advice. For advice about your situation, talk with a Virginia attorney or a tax professional.
The Lease Usually Stays With the House
In Virginia, selling a rental doesn’t automatically end the tenant’s lease. The new owner generally takes over the existing lease and becomes the tenant’s landlord. So a buyer who wants to live in the house usually has to wait until the lease ends, while an investor buying it as a rental may be glad to keep the tenant.
Security Deposits and Notice
Security deposits are typically transferred to the new owner at closing, and the tenant is told who to pay rent to from then on. Ending a lease early, or ending a month-to-month tenancy, takes proper written notice under Virginia’s landlord-tenant law, so check your lease and the law before you promise a buyer an empty house.
Showings With Tenants at Home
Virginia law requires landlords to give tenants notice before entering, so every showing and inspection has to be scheduled around them. Tenants who are worried about having to move may not keep the house show-ready, which can make a traditional sale slow.
Taxes on a Rental Sale
A rental is an investment property, so selling it can mean capital gains tax and recapture of the depreciation you’ve claimed. Some owners defer those taxes by buying another investment property through a 1031 exchange, which has strict deadlines. A tax professional can run the numbers before you sell.
Your Options
- Wait for the lease to end, then list. You may need repairs and cleaning after move-out, and the house earns no rent while it sits empty.
- Sell to another investor with the tenant in place. The lease and the deposit transfer to the buyer.
- Sell directly to a cash buyer. No showings for your tenant to put up with and no repairs, and the sale works with the lease you have.
We buy rental houses with tenants in place in Richmond, Henrico County, Highland Springs, Glen Allen and the surrounding area, including houses with problem tenants or deferred maintenance.
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