For whatever reason, you have decided to sell your investment property, but like all good investment properties, you’ve still got tenants in there. Should you give them notice and hope you get a quick sale while the property is empty and without an income, or keep them in and hope the property is sold to another investor?
In our experience, it doesn’t really matter whether you have a tenant in your property or not. There are pros and cons to both, and sellers still get a good price for their property regardless.
It really boils down to deciding when you need to sell and working out your options.
Here are some points to consider if you’re thinking of selling your investment property:
Without a Tenant
If the tenant moves out a couple of weeks before you put the property on the market, you will have time to make any minor repairs and redecorate – potentially adding value to the property.
From a seller’s point of view, open inspections are easier to arrange for an empty property plus property will not look cluttered with belongings.
Potential investor purchasers will already have done their research on the area and property will have decided whether it is something they’d like to invest in, and a good rental record will demonstrate the property is easy to rent out anyway.
Some say a property sells better without a tenant in it as you are making the property available for the whole market – both property investors and homebuyers who want to move in the moment the ink is dried on the contract.
However, be aware you will not be receiving an income from the property the moment the tenants move out and you will need to be sure you can cover costs for the entire time the property is on the market.
With a Tenant
An already tenanted property, particularly if it is a long-term tenant can be very attractive to potential investors. They won’t have the hassle of looking for another tenant and their investment property is already up and running earning them an income.
Plus you will still be receiving rent while the property is on the market.
While it can be argued potential homebuyers won’t be interested in buying a tenanted property, if the correct procedures are followed, tenants can be given notice to vacate, as long as they are on an expired lease. Not all homebuyers are ready to move in immediately anyway, and many prefer to wait until tenants have served their notice.
You do have some legal obligations to consider when selling a tenanted property. For instance, you must tell your tenants of your intention to sell and follow certain processes for when you’d like to arrange open inspections.
If you do decide you want the property vacated, for whatever reason, legislation in NSW states landlords must give their tenant notice to vacate within certain time periods. To find out more about how much notice you must give and what your legal responsibilities are, visit the information for landlords giving notice on the Office of Fair Trading website.
Selling an investment property tenanted or untenanted isn’t hard and we’d love to help by talking you through the process and explain what your options and legal obligations are.
We have a large database of both investors and homebuyers looking to buy all types of property in the Cardiff and Newcastle regions so give us a call on 02 4954 8833 or pop into our office and our experienced team will be happy to help out.