Sellers
Selling a Rental in Long Beach
Tenants in place, Long Beach rules, and a tax bill to plan for. Here's how to sell your rental the right way.
I'm a real estate broker, not an attorney or tax advisor. Tenant rules change and every situation is different. Talk to a landlord-tenant attorney before you give any notice, and a tax advisor before you list.
Tenant timelines
Selling doesn't end a lease. A buyer takes the home with the tenant and the lease in place. So the first decision is who you're selling to: an investor who wants the tenant, or an owner who wants to move in.
Long Beach has its own just cause rules on top of California's. A tenancy can only end for a reason listed in the law. For most no-fault reasons, like an owner moving in or taking the unit off the rental market, the landlord owes the tenant relocation help, usually one month's rent. Some homes are exempt and some aren't, so get a landlord-tenant attorney's answer for your property before you decide anything.
Tenant timeline checklist
- Pull the lease: fixed term or month to month, and the end date
- List the rent, deposit and any rent increases in the last year
- Ask an attorney which California and Long Beach rules apply to your property
- Decide: sell with the tenant in place, wait for the lease to end, or offer a voluntary move-out agreement
- If you offer money for a move-out, have an attorney write it
- Budget for relocation payments if they apply
- Never pressure a tenant to leave. Get advice first
Showing an occupied home
A tenant who's on your side makes the sale easier. A tenant who isn't can make showings hard and photos worse. Talk to them early, be respectful, and make it easy for them.
California requires reasonable notice before entering, and 24 hours is the usual standard, during normal business hours. When the home is for sale, you first send the tenant a written notice that it's for sale. After that, showings can be scheduled by phone or in person.
Showing checklist
- Tell the tenant you're selling before the sign goes up
- Send the written for-sale notice
- Agree on showing days and times that work for them
- Give at least 24 hours' notice for every showing
- Offer a thank-you for their help, like a rent credit or a cleaning service (in writing)
- Ask permission before photos, and keep their belongings and personal items out of the shots
- Group showings into a few set windows instead of every day
- Lock up or remove anything of value during showings
Questions for your tax advisor before you list
Selling a rental can mean a bigger tax bill than selling your own home. Ask your tax advisor these questions before you list, not after you're in escrow. Timing can change your options.
Questions to bring
- What will I owe in capital gains if I sell this year?
- How much depreciation recapture will I owe?
- Does a 1031 exchange make sense for me, and what are the deadlines?
- If I lived in the home before, does any of the home sale exclusion apply?
- Is it better to sell this year or next?
- Should I set aside money for estimated taxes?
Paperwork buyers will ask for
- Copies of every lease and any amendments
- Rent roll: rent, due date, deposit, lease term
- Twelve months of income and expenses
- Utility bills the owner pays
- Repair and permit history
- Any notices given to or received from tenants
- Security deposit records (deposits move to the buyer through escrow)
Frequently asked questions
Can I sell my rental with a tenant living there?
Yes. The lease stays in place and the buyer becomes the new landlord. Investors often prefer it.
Can the buyer move in?
Sometimes. It depends on the lease and on California and Long Beach rules, and relocation money may be owed. A landlord-tenant attorney should review it before you promise anything to a buyer.
Is it better to sell vacant?
Vacant homes often sell for more to owner-occupants. Tenant-occupied homes can sell well to investors. I'll show you both numbers so you can weigh them.
Does the tenant have to let me show the house?
With proper notice, during normal business hours, yes. Cooperation is what makes it go smoothly, so talk to them early.
What's a 1031 exchange?
A way to defer taxes by buying another investment property. It has strict deadlines and rules. Ask your tax advisor before you list.
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