Selling a rental is different from selling your own home. Tenants, leases, deposits, and taxes all matter. Here is what to think through first.
Tenants and leases
In general, a sale does not cancel an existing lease. The buyer takes the property subject to the tenant's rights under the lease and the law. Your options include:
- Sell with the tenant in place, often to an investor who wants a rented property.
- Wait for the lease to end and sell it vacant.
- Offer a voluntary move-out agreement, in writing, if the tenant agrees.
Give tenants proper notice before showings or walkthroughs, following your lease and local rules.
Security deposits
Missouri limits a security deposit to two months' rent and requires deposits to be held in a federally insured institution (RSMo 535.300). When you sell, deposits and responsibility for them are usually transferred to the buyer at closing. Make sure your purchase agreement and closing statement handle this clearly, and keep records.
Gather your paperwork
- Current leases and any amendments
- Rent roll and payment history
- Security deposit records
- Repair and maintenance history
- Utility arrangements and any open code items
Taxes
Selling a rental can trigger capital gains tax and depreciation recapture. Some owners use a 1031 exchange to defer taxes by buying another investment property, which has strict timelines and requires an intermediary. Talk with a tax professional before you sign a contract.
Choosing how to sell
- Listing vacant can bring the highest price from owner-occupants, but you lose rent while it sits empty and may need repairs.
- Selling to an investor with tenants in place keeps rent coming until closing and avoids turnover work, usually at a price that reflects investor returns.
If you are ready to move on from a rental, request a no-obligation offer, with or without tenants.
General information, not legal or tax advice.
Updated October 28, 2026. General information, not legal or tax advice.