The COVID-19 pandemic, backed-up eviction courts, and strong tenant protections have made it a headache to sell a house with problem tenants in Massachusetts. Many cash buyers and investors will want the house delivered vacant; those who are willing to take it with tenants and assume the risk are likely going to ask for a hefty discount.
So, if you’re a Massachusetts landlord, how can you put yourself in the best position to sell a rental property with tenant issues and get a fair value for it?
Cash For Keys
Paying the tenants to vacate is oftentimes faster and cheaper than going through the eviction process. However, make sure you do this via a written agreement reviewed by an attorney. Make it clear to the tenant that they get paid only after they’re officially out.
It truly helps to swallow your pride on this one. Yes, you might think the tenant is sleazy and doesn’t deserve a penny, but try and take emotion out of the equation. Look at the numbers. Is paying the tenant going to be cheaper and less stressful than evicting them? Is it going to get you more money for your property faster? If the answer is yes, consider taking the deal.
Rental Assistance
Massachusetts now offers help for landlords with nonpaying tenants via a COVID-era program called ERAP (Emergency Rental Assistance Program). Using federal funds from the stimulus bill earlier this year, the program covers over a year of unpaid back rent in some cases, as well as future payments.
Sometimes, tenants fall behind for reasons beyond their control (like job loss or the economy), and this creates a negative spiral where the tenant falls behind, “gives up” on ever trying to catch up, and stops paying altogether. In these cases, you might be able to create a win-win by applying for the program with the tenant, getting them caught up, and turning them into a tenant that pays on time.
Eviction
We recommend this only as a last resort, but if you must evict, then get a great real estate attorney. Don’t try this doing yourself. Unless you really know what you’re doing when it comes to evictions, it’s almost always a bad idea.
There are lots of great attorneys out there, but we personally recommend Rich Vetstein. Attorney Vetstein knows his way around a courtroom, and actually led the effort to get the Massachusetts Eviction Moratorium overturned. We’ve worked with him on opposite sides of closings, and he’s an aggressive advocate for his clients.
Another great option is Douglas Mercurio. We’ve used Attorney Mercurio as well, and he’s an extremely effective real estate attorney and problem solver. He also keeps his costs fairly reasonable.
Cash Buyers
Don’t want to deal with tenants at all? Just want out? There are a few cash buyers out there who will agree to take the property with tenants (hint, hint: Unrivaled Homebuyers). But — and we’re being totally honest here — that extra risk is going to come at some sort of price. You cannot expect to get the same offer for a rental with problem tenants as you would for a vacant property. Anyone telling you otherwise is probably selling you something.
On the other hand, you are going to save yourself an enormous amount of stress, hassle, and headache, and you have to decide what that’s worth to you.