What are the pluses and concerns of selling your property with or without tenants?
Generally, a tenant does not present a property at the same level as a vacated or professionally styled property. This leaves the property owner to guesstimate if the loss of rent (possibly four to five months) will be surpassed with an improved sale price?
It’s not a one size fits all answer, but here are some points for you to consider:
If your tenant remains during the sales campaign:
- Having a tenancy agreement in place could make your property attractive to investors, as it’s already a guaranteed income source.
- If you sell your property to another landlord, your tenants won’t need to move out.
- The vendor’s cash flow is maintained until the settlement.
Good tenants can also reflect how the property has been treated; having long-term tenants looking after the property may drive interest.
- Where tenants have mistreated the property or won’t play ball with the presentation, it may be necessary to give notice in line with current legislation
- With tenants in place, last-minute inspections can also be a headache
If you decide to sell your property vacant :
- Access is easy for maintenance, repairs, painting etc.
- Professional styling can take place, resulting in quality photography for the marketing campaign.
- Open for inspections (OFI’s) or last-minute private inspections are easier.
- However, there will be a loss of income – here’s an example:
- Two weeks to prepare the property – e.g. painting, floor surfaces and repairs.
- One month for an auction campaign or
- One to two months for a private sale campaign
- Settlement is generally two to four months.
- There may be up to 5 months of no income, which is a significant dent in your income stream.
The generally held industry opinion is that a well presented vacant styled property sells quicker, and the final result may offset any loss in rental income during this time.
If you are unsure whether to sell your property with or without a tenant, call us at ela Property Advocates. We will discuss tenancy scenarios and help you make good property decisions. Call Guy Angwin 0412 022 998 or Geoff Briscoe 0419 740 351 Web: www.elapropertyadvocates.com.