I Inherited a House With Tenants: What Are My Options in Georgia?

Inheriting a house is one thing. Inheriting a house with tenants is a whole different situation.

Maybe the person who passed away was a landlord and had tenants living in one of their properties. Or maybe a family member put a tenant in the house after the inheritance. Either way, you can suddenly find yourself responsible for a rental property when you never planned on becoming a landlord in the first place.

So, what are your options?

Should you keep the property and continue renting it? Should you get the tenant out and sell the house vacant? Or should you sell the inherited house with the tenant still living there?

Let’s talk about it.

First, Ask Yourself: Do You Really Want to Be a Landlord?

Before you do anything with an inherited rental property, you need to have a heart-to-heart with yourself.

Do I really want to be a landlord?

Because not everybody is cut out to be one.

Being a landlord can be easy when you have a great tenant. They pay the rent on time, they take care of the property, and they don’t bother you. You might find yourself thinking, “Man, this is amazing. I’m just sitting back collecting checks.”

And sometimes it really can be that easy.

But then you get one bad tenant.

I’ve had properties where I inherited tenants—or bought properties with tenants already in place—and the tenants ended up being a nightmare.

And that’s when you start thinking, Okay, now I understand why somebody wanted to sell this property with the tenant already in it.

A bad tenant can cost you money, time, stress, blood, sweat, and tears.

So be honest with yourself.

If you don’t actually want to be a landlord, that’s important to recognize before you get too far into this.

Option 1: Keep the House as a Rental Property

One option is to keep the inherited house and continue renting it.

But before you decide to do that, you need to look at the numbers.

When I’m looking at a property as a rental, I’m looking at things like monthly cash flow, net cash flow, cash-on-cash return, potential appreciation, depreciation, and the amount of cash I’d have to put into the deal.

At the end of the day, it’s a math problem.

The property needs to produce a return that makes sense for the amount of money and work involved.

I’ve looked at rental properties where the cash-on-cash return comes out to something like 2%.

And I might think, Why would I put my money into this property, deal with a tenant, maintain the property, and deal with all the headaches when I could potentially put that money somewhere else and get a similar return?

That’s the calculation you need to make with an inherited rental property.

And if the numbers don’t work, you don’t have to become a landlord just because you inherited the house.

Selling an Inherited House With Tenants

Another option is selling the inherited house.

But now you have another question:

Do you sell it with the tenant still living there, or do you get the tenant out first?

In my experience, selling a house with a tenant in place can significantly limit your buyer pool.

Why?

Because the average homeowner isn’t necessarily looking to buy a house and immediately become a landlord.

Someone who wants to buy a house to live in may be looking for an owner-occupied property and a mortgage designed for that purpose.

But if there’s already a tenant in the property, the situation can become different for a buyer who intends to keep the property as a rental.

That can mean you’re primarily attracting investors and other buyers interested in rental properties.

And investors are going to look at the deal as a business decision.

They’re going to calculate their potential return on investment.

That’s why an investor’s offer might seem lower than what you were expecting. They’re looking at the property as an investment and trying to determine whether the numbers work.

Need Help With an Inherited House With Tenants?

If you’re dealing with an inherited house with tenants and trying to figure out what your options are, we’d be happy to talk with you about it. Simply fill out the form on this page. A member of our team will be in touch with you as soon as possible.

Should You Try to Sell the House Vacant?

If you’re planning to sell the inherited house on the open market, getting it vacant may give you access to a larger pool of potential buyers.

I’ve bought properties with tenants before, and there are situations where I might simply deal with the tenant until their lease expires.

In other situations, there may be an opportunity to talk with the tenant about moving out early.

For example, you might explain that you’re planning to sell the property and that you won’t be renewing the lease.

Sometimes, the tenant may already be thinking about moving.

Maybe they were planning to move in with a family member. Maybe they simply didn’t realize leaving early was an option.

Sometimes, all you need to do is have a conversation.

Of course, if the tenant doesn’t want to leave early, you can’t simply ignore the lease. You need to follow the terms of the agreement.

And whatever you and the tenant agree to, make sure it’s in writing.

What If There’s a Lease on the Property?

If you inherited a house with a tenant, one of the first things you need to determine is whether there is a written lease agreement.

If there is, read it.

Understand the terms.

Find out when the lease expires or renews and what it says about the tenant and landlord’s obligations.

The lease is going to establish the guidelines for that landlord-tenant relationship.

You also need to look for information about the security deposit.

For example, maybe your dad owned the property and collected an $800 security deposit from the tenant five years ago.

Now you’ve inherited the house.

When that tenant eventually moves out, you need to account for that security deposit according to the applicable requirements and the terms of the lease.

This is one more reason you need to understand exactly what you’re inheriting—not just the house itself.

What If There’s No Written Lease?

What happens if you inherited a house with a tenant but there’s no written lease?

The situation can be different.

In the video, we discuss this as a month-to-month tenancy or tenancy at will in Georgia.

There may be a verbal agreement that the tenant pays rent on a particular date, but there isn’t a written lease establishing a specific beginning and ending date.

If you want the tenant to move out, you still need to follow the applicable Georgia landlord-tenant requirements.

The Georgia landlord-tenant handbook is a useful resource for understanding the rights and responsibilities of landlords and tenants.

It’s worth reading and understanding before you start making decisions about the property.

How Much Notice Does a Tenant Need to Get?

This is an area where you really need to pay attention.

The video discusses a 60-day written notice requirement for certain situations involving a tenancy without a written lease in Georgia.

If there is a written lease, the lease itself may establish the notice requirements and other terms that apply.

So don’t just assume you can tell the tenant, “Hey, I inherited this house and I need you out.”

Read the lease. Understand the applicable requirements. And when you’re dealing with something as important as removing a tenant, getting legal advice for your specific situation can be a very good idea.

When providing notice or communicating about an agreement to move out, keeping everything in writing is also important.

Certified mail, written communications, and documentation can help keep everyone clear on what was communicated and agreed upon.

What Is Cash for Keys?

There’s another option that sometimes comes up when you’re trying to get a tenant to move out.

It’s called cash for keys.

Basically, the landlord offers the tenant money to voluntarily leave the property.

I’ve used this approach before, and sometimes it works.

You might have a tenant who is technically still under a lease, but they’re open to moving earlier if the circumstances make sense for them.

For example, you could have a conversation and say:

“I’m thinking about selling the property. Obviously, you have the right to stay until the end of the lease, but I’m not planning to renew it. If you’d like to leave early, I’m okay with that.”

Maybe the tenant was already thinking about moving.

If both sides agree to terminate the lease early, put that agreement in writing, make sure everyone understands the terms, and then the tenant can move out.

Sometimes you just need to ask.

Of course, if they say no, you still have to follow the lease and applicable laws.

Selling an Inherited House With Tenants vs. Vacant

So let’s bring this back to the original question.

You’ve inherited a house with tenants. What should you do?

You have several things to think about.

You could keep the property as a rental and become a landlord.

You could potentially work with the tenant to move out and then sell the property vacant.

Or you could sell the property with the tenant still living there, particularly if you’re selling directly to an investor who is comfortable purchasing tenant-occupied properties.

The important thing is understanding how each option affects the situation.

If you’re listing the house on the open market and hoping to attract someone who wants to live there, having tenants in place can shrink your buyer pool.

If you’re selling directly to an investor, tenant-occupied properties may be something they’re comfortable dealing with.

The right path depends on the property, the tenant, the lease, the numbers, and what you actually want to do with the inherited house.

What Happens If the Tenant Won’t Leave?

If the tenant doesn’t voluntarily move out when they’re supposed to, there may be legal remedies available.

That’s where you really need to stop trying to figure everything out yourself and talk with an attorney who understands Georgia landlord-tenant law.

Evictions aren’t fun. They’re part of the reality of being a landlord sometimes, but they’re also something you need to handle properly.

Don’t assume you can simply change the locks, shut off utilities, or force someone out.

Understand your rights and responsibilities and get qualified legal advice when necessary.

So, What Should You Do With an Inherited House With Tenants?

If you’ve inherited a house with tenants, don’t feel like you’re automatically stuck with it.

Start by figuring out what you actually want.

Do you want to be a landlord?

If the answer is yes, look at the numbers and understand the lease, security deposit, tenant situation, and ongoing responsibilities.

If the answer is no, you can explore your options for selling the property.

And if you want to sell, consider whether it makes sense to get the property vacant first or sell it directly to an investor who is willing to purchase it with the tenant in place.

There isn’t a one-size-fits-all answer.

The important thing is to understand what you’re dealing with before you make a decision.

Have an Inherited House With Tenants?

If you’ve inherited a house with tenants and you’re trying to figure out whether you should keep it, get the tenant out, or sell the property, we’d be happy to talk with you about your options.

Simply fill out the form on the page. A member of our team will be in touch with you as soon as possible.