Sell your house and stay as a tenant: Episode #346
Todd: Hello. Welcome to Todd Miller TV. I’m joined here with Oana and so the topic has come up of people who want to sell their house but don’t want to move.
Todd: OK? So tell us a strategy for a person who wants to go ahead, sell their house, get all the equity, cash it out, put a ton of money in their pocket but then they could stay in the house. How do they do that?
Oana: OK. So, one of the easy ways to do that is of course to sell your property to an investor who plans to do just that, which is rent out the property.
Oana: An investor would love to go ahead and purchase your house. You get to stay. You get to rent it back. They know that you know the house. You know how to take care of it. It’s perfect. You get money in your pocket. They get a good tenant who is stable, who is taking good care of the house. It’s a win-win situation.
This works a lot of times when people have different upcoming family situations changing. So this works when you know that you’re going to have a job transfer in a few months. This works when you know that your last child is going off to college and maybe you need some cash. All kinds of situations where this works really well where you want to sell the house and get the cash today and move months from now or even years from now, whatever works out best for you.
Todd: So what happens if they do this but then after the close of escrow, the person tries to throw them out? How do they protect themselves?
Oana: Well, everything is by agreement.
Oana: OK? So you have a purchase agreement where you’re selling the property and then you have a rental agreement where you’re agreeing to rent the property and generally, there’s either a month to month agreement if it’s going to be a short term or it’s an annual lease agreement where it’s going to be a year or longer. So it depends on your situation and what you want to negotiate with the investor.
Todd: So if they could negotiate the terms of the lease for the next year or two …
Todd: Like they could say, “I want to stay in. I will sign the two-year lease, which means for two years I get to stay here if I want. But at anytime, I could go month to month, meaning I could give you 30-day notice and break it.” So, that that person has absolutely even more flexibility. They could say, “I could stay there for two years or six months,” and then the investor gets the house and then he gets a tenant for some time and this tenant leaves. He just gets a new tenant which is not that big of a deal.
Oana: Right. So look, it’s all by agreement.
Oana: Whatever you agreed to. Everything is in writing because remember, if it’s not in writing, it’s not enforceable, right?
Oana: So it’s very straightforward and remember, at the beginning of the transaction, we all love each other, so that’s the best time to negotiate everything.
Todd: OK. Good. So that’s a good strategy for a person who wants to sell their house but doesn’t want to move.
Todd: Awesome. Great. So, that is my update for today and hope to see you on another video. Thanks.