How to determine the best path for selling your rental property with a tenant
Has the time come to sell your investment property? There are many reasons why you might decide to sell a property you are letting out, but the truth of the matter is that the selling process can be more complicated if there is a tenant living in the house.
One aspect to keep in mind when selling a house with a tenant in occupation is that you will have less control – the tenant will be in control of how the property is presented to potential buyers, and at what times. If you have a difficult tenant in occupation, this can complicate the marketing and sales process considerably.
Selling a house with tenant could also affect the kinds of buyers that your property will attract. Another property investor might be happy to buy a tenanted house – clearly an indication that the property is a good investment, and will generate an income from day one. However, a buyer looking for a house to live in will probably have concerns about when they will be able to occupy the home – you will need to arrange property inspections with the tenant, and complications can arise around the lease agreement and its terms, potentially protracting the sales process.
And then there is the issue of dealing with the tenants themselves during the marketing and sales process. A tenant has inalienable rights while renting a property, and you cannot violate these. You will need to carefully to go through the appropriate legislation of the territory or state the rental property is situated in to ensure you are not violating the tenants’ rights. For example, how what period of notice do you need to give the tenant before viewings? When should you notify tenants if you are planning to sell the property? Can you ask the tenants to vacate the premises? Tenants’ rights depend on the kind of lease they signed, the state or territory’s legislation and the terms of the lease agreement. Keeping the tenants on your side throughout the marketing and sales process can greatly impact the success of the sale, so you might even consider making special allowances for tenants during the process to ensure smooth sailing. And, ideally, you would of course prefer to earn the rental income until the sale of the property is confirmed.
Clearly, juggling all the different aspects of selling a house with tenants in place can be very intimidating, and working with a licensed, experienced real estate agent can streamline the process, resulting in less stress for you. Perfect Agent can help you find the perfect real estate agent in your suburb. Contact us today.
So how should you go about selling a house with a tenant in occupation? Here are four options to consider:
Option 1: Wait until the lease expires
Probably one of the easiest ways to sell a house with a tenant in occupation is to simply wait until the lease expires and the tenant vacates the property. This would certainly mean less hoops for you to jump through, but there are also drawbacks to this option.
If you are in a rush to sell, waiting for a few months to start the marketing and selling process is clearly not ideal. Also, for the period the property is vacant, you will not be earning the rental income, which is especially problematic if you have a mortgage on the property.
You will need to weigh up the pros and cons and consider you budget when considering this option. A licensed, experienced real estate agent will be able to provide invaluable advice in this instance. Contact Perfect Agent today to find the right real estate agent – at no cost to you.
Option 2: Sell the house with the tenant living there
Your next option is to sell the house with the tenant still in occupation. As discussed, this means you will have less control over how the property is presented to potential buyers, and you will also need to ensure you do not violate the tenant’s rights, in accordance to legislation of the state or territory in which the rental property is situated.
While a buyer looking for a home to live in might be dissuaded by a tenanted property, there are instances where this could actually be a great selling point. A buyer looking for an investment property will usually be very happy to buy a house already occupied by a tenant. A property investor is looking for an income-generating property, and a tenanted property will start generating an income for them from day one. This can be a win-win situation, as, if the tenants are happy and want to continue living in the premises, they should have no qualms with a new landlord taking over the lease.
Of course, the new landlord will need to take the current lease agreement into account, especially with regards to the legislation of the territory or state in which the property is located.
A licensed, experienced real estate agent can cater the marketing strategy towards finding real estate investors who are keen to acquire a profitable, income-generating property, making the fact that the property for sale is tenanted its strongest selling point.
Contact Perfect Agent today to find the right real estate agent – at no cost to you.
Option 3: Work out a special arrangement with the tenant
Your third option is to keep the tenants on your side during the marketing and sales process.
First and foremost, have an honest and frank discussion with the tenants. Inform them that you want to try and sell the property. The tenants might even be keen to move on if the opportunity presents itself, absolving you of dealing with all the responsibilities of selling a house with tenants.
To ensure tenants’ cooperation during the marketing and sales process, you can sweeten the deal for them. For example, you could offer to lower the rental amount for the duration of the marketing and sales process. Or you can agree to let them out of the lease earlier and without penalty while the house is being marketed, should they find an alternative rental property that they like. This will motivate the tenants to work with the real estate agent selling the property, as well as to present the home in it’s best possible light for potential buyers. Instead of working against the tenants, work with them to achieve the best results for all parties involved.
The right real estate agent will be able to guide you during negotiations with the tenants, working towards a successful sale. Contact Perfect Agent today to find the right real estate agent – at no cost to you.
Option 4: Offer the chance for your tenant to buy the property
Another avenue you should explore when selling a house with tenants in occupation is to ask the tenants whether they are interested in buying the property. For all you know, the tenants have reached a stage in their lives where they are considering getting onto the property ladder. If this is the case, your property going to market may be just the opportunity they have been waiting for.
No-one knows the rental property you want to sell better than the tenants occupying it, and if they are happy living there, they might be very willing to make the home theirs, officially. A skilled, licensed real estate agent will be able to negotiate a mutually-beneficial sales agreement between you and the tenant. Contact Perfect Agent today to find the right real estate agent – at no cost to you.
Has the time come to sell your investment property? Selling a house with a tenant can be more complicated than a normal property sale, and there is legislation that governs how and when tenants need to be notified, and what their rights are during the marketing and sales process. You need to be cognisant of this, and handle the process accordingly. The different options discussed above can help you navigate the process, and you need to carefully consider which option would best help you achieve your goals of selling the house with tenants at your convenience at the best price possible price. A licensed and experienced agent will be well equipped to help you during the marketing and sales process, and can provide invaluable advice. Perfect Agent can help you find the agent best suited to help you. All you need to do is to fill out a quick online survey to help us establish your needs, and our team of experts will get back to you within 48 hours with quotes from two to three top-performing, licensed agents in your area of interest – at no cost to you. Is it time for you to sell your investment property? Contact Perfect Agent today to help you find a real estate agent that can guide you through the process.