As part of the selling process here at Fox Stevens Conveyancing, we’ll ask if you wish to sell your investment property either tenanted or vacant.
Here’s what you’ll need to consider…
Advantages of Selling Tenanted Property
When you sell a tenanted property, you continue to receive rental income right up until settlement. This, of course, can ease the burden if you have loan repayments to make.
Tenanted properties may be more attractive to investors (provided, of course, that you have a good tenant!), as they won’t have to look for tenants and will be able to receive rent as soon as the purchase is settled.
Having an existing tenant in the property may also reassure your potential investor buyers that they will be able to find tenants again for this property in the future.
Disadvantages of Selling Tenanted Property
You are required to give written notice to the tenant whenever you want to show the property to potential buyers. It is important that you speak to your managing agent about this to ensure you comply with the agreement in place between you, as owner, and the tenant as you may be required to give your tenant at least 24 hours’ notice in advance. This could 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 to potential buyers.
Furthermore, if a buyer prefers to buy a property with vacant possession, having a tenant in the property may be considered an inconvenience.
The sale process will affect both you and your tenant. 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.
If you have a fixed-term lease with your tenant, they have the right to stay in the property until the end of the term. In other words, you can’t just ask them to leave because you’re selling the property.
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 Fox Stevens Conveyancing your local Newcastle conveyancer via firstname.lastname@example.org (0414 894 031) or Julie@foxstevens.com.au (0488 325 980) to discuss.
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