16 August 2016
Selling your leased investment property
So you’ve decided it's time to sell your investment property however it's currently leased.
It's too long to wait until the lease expires to put the property on the market. It’s a common enough situation, but obviously this presents challenges for both yourself and the tenant.
I’m Amber Drummond, Franchise Services for Raine & Horne SA. Here are a few tips if you are considering selling your leased investment. It’s may be difficult for you to showcase your property while there’s people living in it and it’s disruptive for tenants to have potential buyers traipsing in and out of their home every week. So what are the rules?
Learn better by video? Check out Amber's presentation further down this page!
- You are within your rights to put your property on the market at any time.
You must notify the tenants of your intention to place the property on the market and are required to provide the tenants 14 days notice in advance of any marketing of the property. Most landlords and tenants are able to amicably reach an arrangement for open for inspections that suits both parties. You need to consider the working hours & family arrangements of the tenants. If you preset weekend open inspection times you stand the best chance of an accommodating tenants. Consider that reasonable access is no more than 2 times in a seven day period. Take care if you decide to place the property on the market within the first 2 months of a tenancy, if you didn’t declare at the commencement of the lease that you were considering placing the property on the market the tenants may have grounds to terminate their lease without penalty.
- The tenancy agreement remains valid once the property changes hands.
Its important to advise the tenants that their lease is secure and must be honoured by the new owners. Reminder that the tenants must be advised of the new owners details within 14 days of the contract is entered into including their full name, contact details & bank account for rent payment beyond settlement. If the tenancy is periodic you can serve the tenants notice effective from the sale contract date. It's good idea to have written instructions from the purchaser for this to cover yourself.
- Do you need to compensate the tenants for opens?
It might be a sweetener to offer the tenants a rent reduction during the sale campaign to say thank you for allowing access & keeping the property clean & tidy for opens. Other methods that can help ensure the tenants present the home it its best light is by arranging a house cleaner periodically before opens or arranging fresh flowers to be delivered to the property.
Always remember the best way to ensure that you, the agent and the tenant are all on the same page is communication. Keep everyone up to date with the progress of the sale and you will stand the best chance of keeping a harmonious relationship with your tenant and achieve a positive sale.
Hope this information has been helpful, if you have any queries please don't hesitate to contact me.
Raine & Horne South Australia
0438 000 242