In an ideal world, your property would have on its best face before sale; vacant, in pristine condition, and with a few beautiful pieces of furniture arranged like a magazine shoot. But with a tenant occupying your property, complications can arise and more planning is needed.
The important first decision is “am I better off selling my property vacant?” This means missing out on rental monies until a buyer is found and through to settlement, which usually is a period of some months. But there are ways of reducing the loss of important income, and ensuring rent throughout your sales campaign.
First, look at the lease
What kind of lease is your tenant on? And when does it expire? Answering these questions will point you in the right direction, as tenants are entitled to have full use of the property until the lease termination date. If you want to have the property vacant for sale they need to be issued a Notice to Vacate, which if the tenant is on a month-by-month lease is at least 60 days notice. Note that the legislation allows tenants to respond with a 14-day notice to vacate, which would leave the property empty regardless.
Legally, all tenants must allow the agent to escort prospective purchasers through their home once open for inspections begin. The tenant must be advised at least 24 hours in advance (preferably in writing to avoid potential disputes) and it must be arranged during daytime hours.
Then get your tenant onside
It is important to get the tenant onside for the sales process being flexible in allowing access for inspections, presenting the property in good condition and preferably not being present at inspection times.
Consider your tenant’s response when you break the news. They are going to have to accommodate people going through their home, and are likely to have to look for a new place to live.
So is there anything you can do to make the process easier for them?
Some owners offer a reduced rent throughout the sale period, or a rent free period when the property sells. This could ensure their cooperation during inspections, as well as a tidy, presentable house.
Another approach is to offer their tenant a cleaner to come once or twice a week before open for inspections, which is considered money well spent to ensure a tidy house.
Your property manger will be able to offer your tenant assistance in finding another property, keeping them advised of upcoming suitable properties.
Importantly good lines of communication from you property manager and sales consultant with your tenant, explaining the process and maybe assisting in finding another property for your tenant is the key to getting the tenant onside.
And consider what kind of buyer you’ll attract
Selling you property with the tenant in place can have advantages. The kind of person likely to buy your property will have a bearing on how the sale proceeds. Tenanted apartments have the potential to attract investors who are looking for an income-producing property. These buyers don’t want to live in the apartment themselves, but do want to be reassured that it’s possible to rent it out, and thus the presence of a tenant provides a ready made income from day one.
Always make your sales agent and property manager your first port of call for research and advice on the options available. If you can establish a mutually beneficial relationship with your tenant they can become an ally in your sales campaign