​Sell with tenant or give notice of intent to sell soon?

[Jack B.]

I have a tenant of about 3 years in my lowest performing property in Maple Valley that has not gone up in value for 3 years and although rents are good/solid cash flow and principal pay down ($500 a month CF, $385 a month PP), the HOA is driving me nuts and I'm looking to sell and take the 200K equity left after transaction costs and re-leverage into other properties, such as two SFR's.

The longer I wait the worse things get for me. December and March we are looking at raised interest rates again. I’ve been holding off on selling this house due to the holidays and not wanting to kick this tenant out during the holidays, they have credit issues that makes it difficult for them to rent, but…at the same time I can’t take it in the shorts because of their issues, I’m running a business.

Soooo…Should I tell them now that I intend to sell the house at the end of January OR let them know in January I plan on listing the house for sale and they are welcome to stay until it is sold?

The sooner I sell it the better off I will be as far as interest rates and timing the sale and purchae of replacement properties via 1031 exchange. They have a lot of crap, the garage is filled to the door and they have a lot of cats that you can sometimes get a whiff of their urin that they somehow got on themselves…Not sure it will present spectactularly that way but at the same time, in this market, I’m no longer hoping for a quick one month sale. I’m planning on it taking 3+ months. So what to do?

OR I could just raise their rent to market, make an extra $200 a month, and grind out the HOA another year. It's been almost 5 years and I am tired of them.