Sell your rental, tenants and all

You don't have to wait for your tenants to leave

Many landlords assume they need an empty house before they can sell. On the open market, that's often true in practice: buyers using a mortgage usually want to move in, which means the tenant has to be gone, and showings around a tenant's schedule are hard to manage. When you sell to us, the tenant can stay. We buy rental houses with leases in place, with month-to-month tenants, and even with tenants who are behind on rent.

Why landlords decide to sell

We hear from Long Island landlords for all kinds of reasons:

• They're tired of being on call for repairs at all hours
• Property taxes and insurance keep rising faster than the rent
• A tenant stopped paying and the situation has dragged on
• The house needs a roof, a boiler, or other big repairs they don't want to fund
• They inherited a rental and never wanted to be a landlord
• They're retiring, moving away, or want to simplify their finances
• They want to sell before rules or costs change again

Whatever the reason, it's a legitimate one. Owning rental property on Long Island is hard work, and there's nothing wrong with deciding you're done.

How a sale with tenants in place works

When a house is sold with a tenant in it, the tenant's existing lease generally continues under the new owner. The tenant keeps paying rent, just to us instead of you, and their rights under the lease and New York law stay the same. Security deposits transfer to the new owner at closing, and your attorney will handle the details so it's done correctly.

For you, the process looks like this:

1. You tell us about the property, the tenants, and the leases.
2. We arrange a single visit, with proper notice to the tenant.
3. We send a written offer.
4. Your attorney reviews the contract, including how leases and deposits are handled.
5. We close on the date you choose.

You won't need to schedule a series of showings, stage the house, or ask your tenant to keep things spotless for strangers walking through.

Talking to your tenants

Tenants usually find out a property is being sold one way or another, so it's often best if they hear it from you. Keep it simple and honest. Let them know you're selling, that their lease will be honored, and that someone will need to visit once to see the property. Give them proper notice for that visit, as required by your lease and New York law.

Most tenants are much more comfortable with a single visit from a buyer than with weeks of open houses. We'll be respectful of their home and their time.

Tenants who aren't paying

This is one of the hardest situations for a small landlord. In New York, removing a tenant for nonpayment requires going through housing court, and the process can take a long time. Meanwhile, the mortgage, taxes, and insurance are still due.

We can buy a property with a nonpaying tenant. It does affect the price, because we'll be taking on the time and cost of resolving the situation. But it means you can stop carrying the property and move on. If you already have a case in housing court, let us know where it stands. Your attorney can advise on how a pending case is handled in a sale.

Two-family houses and accessory apartments

Plenty of houses around Lindenhurst and the Town of Babylon have a second unit: a basement apartment, an apartment over the garage, or a legal two-family layout. Not all of those units are legal or permitted.

Inside the Village of Lindenhurst, rental and building permits go through the Village. In North Lindenhurst, Copiague, West Babylon, and the rest of the unincorporated Town of Babylon, they go through the Town. If your second unit doesn't have the right permits, it can become a problem during a traditional sale, because the buyer's lender and attorney will see it.

We buy houses with accessory apartments whether they're permitted or not. We'll price the property based on what it actually is, and we'll handle resolving any permit issues after we buy. You should still talk to your attorney about any disclosure obligations.

What we look at when pricing a rental

• The current rents and lease terms
• Which units are legal and which aren't
• The condition of each unit and the building's systems
• Whether tenants are paying on time
• Taxes, insurance, and utility arrangements
• Any open violations or permits

The more information you can share, the more accurate our offer. A simple list of units, rents, lease dates, and deposits is a great start. If you don't have everything organized, that's okay. We'll work with what you have.

Rent stabilization and other regulations

Most single-family and two-family houses in the Town of Babylon are not rent-stabilized. But New York's tenant protection laws have changed significantly in recent years, and some of them apply statewide, including rules about security deposits and how evictions work. If you own a larger building, or you're not sure which rules apply to your property, talk to your attorney. We'll work within whatever rules apply.

Selling a rental vs. listing it

If your rental is in good condition, the tenants are paying, and the property would appeal to other investors, you may get a strong price by listing it with an agent who specializes in investment properties. That route takes longer and involves more showings, but it can make sense.

Selling directly to us makes more sense when:

• The tenant situation is complicated
• The property needs significant work
• You want a predictable closing date
• You don't want to disrupt your tenants with repeated showings
• You want to be done quickly

Taxes on the sale of a rental

Selling an investment property can have different tax consequences than selling your primary home. Depreciation you've taken over the years may be recaptured, and capital gains rules apply. Some investors use a 1031 exchange to defer taxes by buying another investment property. Talk to your accountant before you sell, so you understand what you'll owe and whether any strategies make sense for you.

Vacant rentals

If your rental is already empty, even better for simplicity. We can buy it as-is, with no need to fix it up or find a new tenant first. See our page on selling a vacant house for more on the risks of leaving a property empty for long.

Being done with it

The most common thing landlords tell us after closing is how much lighter they feel. No more late-night calls about a leaking water heater. No more chasing rent. No more wondering what the next tax bill will be. If you're ready to get there, give us a call.

What happens to your tenants after we buy

Tenants often worry when they hear the house is being sold. We take that seriously. If there's a lease, we honor it. We introduce ourselves, give them our contact information for rent and repairs, and handle maintenance requests promptly. If we have future plans for the property, we follow the lease and the law, and we communicate clearly and early. Being a decent landlord is part of how we work, and it makes the transition easier for everyone, including you.

Questions to answer before you call

It helps to have rough answers to a few questions. How many units are there, and what does each one rent for? When do the leases end? Who pays the utilities? Is anyone behind on rent, and by how much? Are there any open complaints, violations, or court cases? Don't worry if you're not sure about everything. We can work through it together on the first call.

Security deposits under New York law

New York's rules on security deposits were strengthened in recent years. In general, there are limits on how much a landlord can collect as a deposit, requirements for returning it, and rules about deductions. When a property is sold, the deposits need to be transferred properly to the new owner, and tenants should be notified. Your attorney will make sure this is handled correctly at closing.

Leases with option or right-of-first-refusal clauses

Occasionally, a lease gives the tenant an option to buy the property or a right of first refusal if the owner decides to sell. If your lease has a clause like this, it must be respected. Show your leases to your attorney early, so any rights can be addressed before you sign a contract.

Section 8 and housing assistance tenants

Some tenants pay part of their rent through a housing assistance program. Those arrangements generally continue when a property is sold, but the new owner will need to work with the housing agency to continue receiving payments. We're familiar with this and can coordinate with the agency after closing.

Records that help us price your rental

• Copies of current leases
• A list of rents and payment history
• Security deposit records
• Utility bills the landlord pays
• Recent repair invoices
• Any notices from the Village or Town about rental permits or violations

The more you can share, the more confident we can be in our offer.

Tenants who want to buy

Sometimes a tenant hopes to buy the house they're renting. If your tenant is interested and can get financing, that may be worth exploring before you sell to anyone else. If they can't qualify or the timing doesn't work, a direct sale to us is still available.

Selling a rental you used to live in

Some landlords rented out a house they once lived in. If it was your primary residence for part of the time you owned it, the tax treatment may differ from a pure investment property. Your accountant can tell you whether any part of the capital gains exclusion applies to your situation, and how depreciation affects it.

How the sale works

Questions