As part of the selling process, you’ll need to decide if you wish to sell your investment property with or without your tenants.
If the tenants stay
When you sell a tenanted property, you receive rental income right up you settle. This can be of a great help to your cashflow, if you have loan repayments to make.
Tenanted properties might be more attractive to investors (as long as you have a desirable tenant), as they won’t have to look for tenants and will be able to receive rent as soon as the purchase is settled.
Existing occupants may also reassure potential buyers they will be able to find tenants again for this property in the future.
If you sell the property vacant
You will need to give written notice to your tenant, whenever you want to show the property to potential buyers. Talk to your property manager about this, to ensure you comply with the agreement in place between you (as owner) and the tenant, as you could be required to give your tenant at least 24 hours’ notice. It can get messy, particularly when some tenants may start to feel put out by a process they aren’t even benefiting from.
You won’t be able to style the property to make it more presentable. If you have a messy tenant, your property may look less attractive.
If a buyer prefers to buy a property with vacant possession, having a tenant in the property may be considered an inconvenience.
Not only are they facing the possibility of having to find a new place, but you also have to rely on them to keep the property in a presentable condition for inspections. This extra variable could go either way.
Tenants on a fixed term lease have the right to remain in the property A pending sale doesn’t change this.
Discuss these scenarios with your selling agent and managing agent PRIOR to listing the property and work out the best plan of action for your particular circumstances.
If you have any questions about your situation, contact me via leah@stevensconveyancing.com.au or call 0414 894 031 to discuss.
Please note that the information contained in this article is of a general nature only and does not constitute legal advice. Stevens Conveyancing does not take responsibility for any errors or omissions obtained from the use of this information.