Real Estate Investing & Lease Transfers in Colorado

In today’s edition of True Confessions from your Trusted Real Estate Professionals, we’re diving into a scenario that may surprise many buyers and sellers—what happens when a property sells with a tenant and lease agreement already in place?

Recently, I represented sellers who had their Denver Metro townhouse on the market. Like many homeowners right now, they faced a softer market with more inventory and lower offers than expected. Instead of leaving the property vacant, they leased it out to a tenant on a year-long lease, and we pulled it off the market. Just weeks later, an attractive offer came in.

Here’s where it gets interesting: in Colorado, a lease survives a sale. That means the terms of the lease the sellers signed with their tenants automatically transfer to the new owners.

For investor buyers, this can be a huge win. In this case, the new buyers were planning to rent the property anyway, so inheriting a tenant meant no vacancy, no turnover, and no marketing to find renters.

But what if you’re a buyer looking for a primary residence? If the property you want is still occupied with more than 60 days left on the lease, you must purchase it as an investment property. That means a larger down payment and different financing terms—even if your plan is to eventually make it your primary home.

This nuance is just one example of how experience and knowledge matter in real estate. Navigating dates, deadlines, leases, and contracts can feel overwhelming, but our team has guided countless investors and homeowners through the process. Whether you’re buying your first home, flipping your tenth property, or curious about long-term investing, we’re here to provide the expertise and advocacy you need.