Hi all,
Just after some advice. We have a property in sydney which we currently have rented out. Our problem is we have now desided that we would like to sell this property. I have been told that due to the fact that the lease agreement still has another 10months to go that we cannot sell within this time frame. Is this the case?
Thanks in advance.
Jason S
J A C,
I just bought an IP in sydney. The vendor didn;t put in a tenant because she wanted to be able to sell it to both an owner occupier or an investor. Obvoiusly, you can’t sell it to an owner occupier as easily if it has a tenant. Hence, you’ll be selling toan investor, who wants a tenant. It depends on what the rental is too- if the RE agent thinks it’s too low, they might be concerned that someone may not want to buy with that yield and be stuck with it for 10 months.
With my place, it was non-tenanted when I exchanged, but the old vendor wanted to put in tenants between exchange and settlement so she could have the income- fair enough! Means I have an auto-tenant anyway, but she wanted to see if it was an investor buying before she got the tenant.
You can *absolutely* sell with a tenant- just think about what the current yield is… and how to make that attractive to an investor.
kay henry
You can definately sell even though the tenants still within their lease agreement. The decision is one you will have to weigh up for yourself. the problem I find when we have a situation like this is that the majority of the time the tenants react unfavourably to this situation. However they must give the agent access for the suitable times that are negotiated between the tenant and the agent. Sometimes this can become a nightmare, as a case of one of our properties most recently. The tenant after a few weeks refused entrance, but thankfully we found a buyer for it.
sometimes tenants will agree to the open times but leave the property looking like a pig sty. One tenant even sat throught the opens in the lounge room smoking a cigarette and doing other ungodly things. But generally these nightmare tenants are few and far between.
One quick word of advice is to negotiate a rent reduction for any inconvenience. This is generally paid when the property has been exchanged or officially withdrawn from the market. And only allow the reductions for the weeks you actually did enter the property.
In the end it is up to you to weigh the situation up and remember there are some wonderful tenants out there who accept the situation and actually help you sell your property. You might also want to think about whether the tenant may want to purchase the property from you. You should also give them that chance becuase it can be a win win situation.
J Dylan
Dear Jason
You can sell the property anytime you like. But if the lease is still in the fixed period, then the lease is still binding on both parties, the tenants and whoever the owner is. You can negotiate with the tenants, but you can’t remove them against their will until the lease expires.
The tenants can jump either way when their place is up for sale. They might want to stay, or go. And they might want to buy it from you as mentioned by jdylan. Are they candidates for a wrap ? When you say the lease has 10 months to go, I assume that means the fixed term of the lease has 10 months left before expiry. In that case, a buyer who becomes the new owner cannot remove the tenants until the fixed term of the lease expires. You need their co-operation during the selling process, easy access, good property presentation, punctual rent payments, so explain the benefits of the new situation to them. If they look & act like good tenants, the new owner will be more likely to want to keep them on, after the lease expires. If they play up, they will create a bad tenant record for themselves which will haunt them through tenancy databases, and the new owner will remove them asap, after the lease expires.
Stay close to your PM, it’s a great learning time, and get a grip on who has what rights because at a time like this, all those rights are being exercised and are interacting at once.
hop eit runs smooth for you.
cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
1st of all thanks for your replies. We realise now that we should have stuck to our plans and sold the house instead of opting for tenants. However its done now so all we can do is deal with it as it is now.
Our biggest concern is the property now not looking as presentable as we had it (lawns mainly) and also reducing the people that the house will appeal to due to the tenant factor. Another option is to hold out the 10 months then sell that way we can tidy it up a little if need be and sell a vacant home.
May even think of telling tenant we will look after the lawns for him at our cost. That way it saves him doing it and i know they will look good during the sale. Is this a good idea?
Will speak with agent to talk a price and if they think we can still get the $ we are after in quakers hill then we will go ahead.
Thanks again for the advice.
Cheers Jas!
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