Being a landlord in Edmonton has its rewards, but there comes a time when selling makes more sense than holding. Whether you’re burnt out on managing tenants, looking to cash out your equity, or simply ready to move on, selling a rental property comes with its own unique set of considerations that are very different from selling a primary residence. Here’s what you need to know before you put that rental on the market.
Your Tenants Have Rights, and So Do You
In Alberta, the Residential Tenancies Act governs the relationship between landlords and tenants, and it doesn’t disappear just because you’ve decided to sell. If your property is currently occupied, you cannot simply ask tenants to leave because you’ve listed the home. You must follow proper notice procedures, and in many cases, tenants have the right to remain in the property through the sale. If a buyer intends to occupy the property personally, proper written notice must be given, and timelines must be followed carefully. Skipping this step can delay your closing or expose you to legal liability.
Tenants Can Complicate Showings
Even cooperative tenants can make showings difficult. You’re required to give proper notice before entering the property, and a tenant who isn’t thrilled about the sale may not present the home in its best light. Dishes in the sink, personal clutter, and general untidiness are all out of your control. This is one of the biggest reasons landlords choose to sell to an investor rather than listing on the open market, investors buy the property as-is, tenants and all, with no showings required.
Capital Gains Tax Applies
Unlike a primary residence, a rental property is not exempt from capital gains tax in Canada. When you sell, you’ll owe tax on 50% of the profit above your adjusted cost base. This is a significant consideration and one worth discussing with a tax professional before you sign anything. Timing your sale strategically, for example, in a lower income year, can make a meaningful difference in what you owe.
The Property Doesn’t Need to Be Empty to Sell
Many landlords assume they need to wait for a tenant’s lease to end before selling. That’s not always true. Investors and experienced buyers purchase tenanted properties regularly. In fact, a property with a reliable, long-term tenant already in place can be an attractive feature for certain buyers.
You Have Options
If you’re ready to sell your Edmonton rental property and want to avoid the hassle of showings, tenant negotiations, and months on the market, we can help. At FairKey Home Buyers, we purchase rental properties in any condition, with or without tenants, and we handle the process from start to finish.
Give us a call anytime at 587-401-2627 or fill out the form on our website today.