Do I sell my property with or without tenants?
This is a question I often get asked by our property management clients. The answer – as it often is with real estate – is that it depends on the situation. Here are some pros and cons to each approach.
Pros and cons of selling a vacant property
If you wait until your tenants have moved out, you’ll have more control over how the property is presented to potential buyers. You’ll also have easy access to the home for inspections because you won’t have to give the tenants notice in advance.
Plus, if potential buyers are looking at the property as their new home, they’ll find a vacant property more attractive because they can easily move right in after settlement and not worry about waiting for tenants to find a new home.
However, there are a couple of downsides to waiting for your property to be vacated before putting it on the market. First and foremost, you’ll be losing out on the rental income while the property is for sale and also until it settles, which may be an issue depending on the size of your debt.
While a vacant property will appeal to people who want to live in it, it may be less appealing to property investors who may prefer that there are already tenants in place and the property is generating income from day one.
Pros and cons of selling a property with a tenant in place
If you’re in a hurry to sell, putting your property on the market with tenants in place can be the way to go. Rentals are scarce at the moment and it could take your current tenants quite some time to find another property to move into.
A tenanted property will be viewed favourably by property investors because they can get rental income as soon as the property settles. They can also see that the property is well looked after (if this is the case) so they can feel confident that they have good tenants in place.
Keeping your property tenanted while it’s on the market also means that you have regular rental income coming in, right up until the day of settlement. Plus, a tidy, furnished property will present much better than an empty one in photographs.
On the flip side, it might be more difficult to schedule appointment times for potential buyers because you’ll have to give your tenants notice before any scheduled inspection. If your tenants are tidy and keep the property immaculately, then presentation shouldn’t be a problem.
Tips for selling a tenanted property
If you choose to put your property on the market with tenants in place, always let the tenants know what your plans are. This is their home, and you’re going to want them on your side to ensure that the property is well-presented for each viewing. They may even want to buy it themselves, which can be a great outcome for all.
You’ll need to give your tenants written notice of upcoming inspections at least 24 hours in advance. Apart from being a legal requirement, this gives the tenants time to tidy up and make arrangements to be out of the house at that time. Another way that you can get the tenants on side is to offer them an incentive, such as a reduction in rent or a week’s free rent once the property sells to put towards relocation costs.
Alternatively, if you prefer to sell an untenanted property, be decisive. Give your tenants notice and plan any work on the property in advance so you can move quickly and minimise the time your property is not generating an income. We can help with this and share contacts for our trusted tradespeople and stylists.
Selling an investment property? Talk to us
At Home Property Agents, we have years of expertise in helping investors make the right decisions about buying and selling properties. We’re fully experienced in selling tenanted and vacant properties and can assist you every step of the way. Please feel free to get in touch.
