Thursday, November 28, 2019 / by AJ Shepard
My investment property is rented out but I want to sell it. Selling an occupied investment property is similar to any other real estate sales with a few additional steps to be aware of.
1. Marketing the property: Potential buyers want to see as much of the property as possible, and the best way to accomplish this is to have interior and exterior photos and videos. If the property is fully occupied and you do not want to disturb tenants by taking pictures of the interior, exterior photos should be taken and published.
2. Listing the property for sale: Once the property is listed for sale, the average market time is between 50-75 days to get an accepted offer.
3. Accepted offer: Once an offer is accepted, the buyer has 10 business days for their inspection period. During this time they are able to schedule any inspections they wish to perform. Typical inspections include: full property inspection, radon test, sewer scope, and mold testing. During this time, the seller must provide property disclosures to the buyers. These disclosures cover any information the seller must truthfully disclose to the buyer.
4. Closing: After the accepted offer, the sale typically takes anywhere between 21-45 days to close and record.
Important Things To Know:
1. If the buyer plans on moving into one of the units, a 90-day eviction notice must be sent to the unit(s) the buyer wishes to vacate. This notice must also include information describing Oregon Relocation Assistance for tenants. If the property is located in the city of Portland, there must be additional information that covers Portland Relocation Assistance.
2. What is relocation assistance? Relocation assistance is meant to protect the tenants that are being evicted with no-cause. After sending the no-cause eviction the owner has 45 days to pay relocation assistance to the tenant(s). If the owner increases rent more than 10% in a 12-month period, and this increase forces the tenants to move for financial reasons, the owner has 31 days to pay relocation assistance after receiving the tenants' notice to move out. The tenants have six months from the time rent is increased to provide notice and move out. If the tenants do not move out during that six month time period, relocation assistance is not required. Below are the assistance amounts for the city of Portland.
Rental Size Amount
Studio or Single- $2900
Exceptions to Relocation Assistance:
There are situations the owner of the property may be exempt from having to pay relocation assistance. Below are the scenarios for which the owner would not be required to pay relocation assistance.
1. Rental agreement for week-to-week tenancies
2. Tenants that occupy the same dwelling unit as the landlord
3. Tenants that occupy one dwelling unit in a Duplex where the Landlord's prinicipal residence is the second dwelling unit in the same duplex
4. Tenants that occupy an Accessory Dwelling Unit that is subject to the Act in the City of Portland so long as the owner of the Accessory Dwelling Unit lives on the site
5. A Landlord who temporarily rents out their principal residence during an absence of not more than 3 years
6. A Landlord who temporarily rents out their principal residence during the Landlord's absence due to active duty military service
7. A Dwelling Unit where the landlord is terminating the rental agreement in order for an immediate family member to occupy the dwelling unit
8. A Dwelling Unit regulated or certified as affordable housing by federal, state or local government is exempt from paying Relocation Assitance for a Rent increase of 10 percent or more within a 120-m-month period:
a. So long as such increase does not increase a tenant's portion of the rent payment by 10 percent or more within a rolling 12-month period; or
b. In Lease Agreements where the rent or eligibility is periodically calculated based on the tenant's income or other program eligibility requirements and a rent increase is necessary due to program eligibility requirements or a change in tenant's income
This exemption by Subsection 30.01.085.1.8 does not apply to private market-rate Dwelling Units with a Tenant who is the recipient of a federal, state, or local government voucher; This exemption by subsection 30.01.085.1.8 applies to rent increases and does not apply to Termination Notices:
9. A Dwelling Unit subject to the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970
10. A Dwelling Unit rendered immediately uninhabitable not due to the action or inaction of a Landlord or Tenant
11. A Dwelling Unit rented for less than 6 months with appropriate verification of the submission of a demolition permit prior to the tenant renting the unit
12. A Dwelling Unit where the Landlord has provided a Fixed Term Tenancy and notified the Tenant prior to occupancy of the Landlords intent to sell or permanently convert the Dwelling Unit to a use other than as a Dwelling Unit subject to the Act.