The Pros and Cons of Selling a Tenanted Property

If the time has come for you to sell your property, the issue of what to do about the tenants can be a tricky one.
 
This is especially the case if you have had great long-term tenants, but there are ways to navigate this situation that can minimise disruption and even be a selling point! There is always the risk that the new owners will want to live in the property themselves and therefore evict the tenants on settlement, however this is outside of your control and is one of the risks tenants face in every property.
 
If you have decided to sell and are wondering what to do about your tenants, your first priority is to weigh up the pros and cons. Any decision you make must be in your best interests of course but the implementation of your decision must respect their rights as tenants too.
 

Pros 
 
• Continued income source - a tenanted property will continue to generate income during the sale period, keeping you financially stable of ahead as the process is underway. It can take many months to sell a property to retaining your rental income can be very handy indeed.
 
• Ready-made tenants – if a buyer is looking for an investment property, the bonus of having good tenants already in place can be another selling point. Assuming they are good tenants who take care of the property, it can also mean the property is well presented at inspections, looking and feeling lived-in to prospective buyers and won’t require costly home staging.
 
• Go to market is immediate – if the property is sold tenanted, there will be no delays in putting it on the market. Otherwise, weeks to months may pass as you wait for tenants to vacate, or for necessary cleaning, repairs and maintenance to be made after their departure.
 
 
Cons
 
• Uncooperative tenants – there is often resentment when a tenant learns you are selling ‘their’ home, and this can put them offside when it comes to making the property available and presenting it nicely for open inspections.
 
• The inconvenience – buyers who are looking to become owner-occupiers can see the removal of existing tenants as an inconvenience. They may also feel uncomfortable inspecting a property they know is currently the home of people they will be evicting. This can be off-putting enough that they disregard the property as an option altogether. 
 
• Breaking the lease – rules will vary from one are to the next, but generally speaking, on a fixed lease the rights are with the tenants, so you’ll need to negotiate departure with them and are at the mercy of their decision. This means you’ll either wait for their lease to end, agree on a vacate date, or sell the property tenanted. In a continuing tenancy agreement, you simply need to adhere to your lease regarding the required period for a notice to vacate. 


If you intend to sell an investment property, it will be important to have an expert consultant. To learn more about your obligations and your tenant's rights when it comes to selling a tenanted home, get in touch with one of our qualified real estate professionals.


 

by Michael Hamilton

Sales & Marketing Consultant | 0426 042 082

The Pros and Cons of Selling a Tenanted Property
palmbeachfn.com.au December 2022
First National Property Solutions
Ph: 07 5559 9600