Wondering what selling techniques are used by property investors to sell properties whilst maintaining a rental return by means of retaining tenants.
I have a property in rural NSW that is negative cash flow, which is a bit of a dog and decided to off load it. The current tenants have 2 months left on the lease. I’m concerned if I place the property on the market now and it doesn’t sell in the next 2 months the tenant is going to leave resulting in a loss of income. The property would more than likely be bought by owner occupier than a property investor.
After waying up all the risks would it be inappropriate to wait placing the property on the market until the tenant re-signs a lease for another six to twelve months? OR are the tenants going to feel resentful resulting with an unsavoury situation?
Cheers,
GeoffBIt might be better to wait until the tenants are out before trying to sell. Tenants can be uncooperative (sometimes), not letting agents in, and not keeping the place tidy etc.
Also if you sign them up for another 6 month lease, what would happen if an owner occupier wants to buy it? They would have to wait 6 months before moving in. This could result in a smaller market and therefore lower sale price.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Most tenants will be very nice about it. After all, if they are happy with where they live, they will want to stay there. There may be some concern about an owner occupier buying the place but you should asure them that you will let them know with plenty of time to get themselves sorted out.
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksBe honest and up front with your tenant.We have a prospective looking at our Unit in the morning.This prospective asked me more about the tenant than the unit when she rang me.
I’v told the tenant this prospective buyer seemed very keen for her to say on.
It’s a nervous time for tenant’s [worried]The tenant may not want to go to the trouble of leaving their home if they are happy there on the chance that you may sell the home – it consts money and effort to move. Tell the tenant that you are looking to sell and try to keep the opens to a minimum.
Deal with an agent who does not do the evasive ‘open for inspections’ to the whole public. Try the private selling agents who sus out the buyers before they bring them to the house. I’ve sold 4 times and have never had the ‘open for inspection’ times with anyone and everyone welcome – I prefer few quality buyers rather than a stream of tyre kickers shuffling through and your tenant would probably prefer the same – plus it keeps the tenant feeling respected.
Also remember that the buyer – even if they are an owner occupyer may have reasons to stay in their own home for a while before they move in to the new one and may see the tenant as real bonus. I’ve seen many situations where the new buyer has not sold their house yet and needs time to do so, needs the kids to finish in their school year first, may want to move into the area later but not ready yet, you get the picture.
So keep the tenant, be respectful to them, and see if you can meet your needs with a really good agent.
hope goes well
I agree with the other posts, it is probably a good plan to be up front with the tenants. We are tenants at the moment and we would appreciate that although you there is always the risk of them being uncooperative what ever you do. Maybe try to limit inconvenience to them with regard to inspections as it’s not much fun as a tenant having potential purchases walk through what you see as your home even though you don’t own it!
You could always put them on a rolling tenancy (if they are happy to do that) whereby it is a 1 month notice period for either party but then they can give you 1 month’s notice if they want to.
Another thought is maybe buy them some beer or chocolate or something to thank them for their cooporation… just some thoughts…
Hi,
I agree with most posts suggesting honesty with your tennants. I have 2 properties on the market at the moment. One tennant is a night worker (not sex)who finishes work at different times of the morning and he did not want people inspecting when he was asleep .He agreed to allow tw0 days per week for inspections at his nominated times. The selling agent was happy with this arrangement.The other tennant was nervous when advised we want to sell so we offered her the chance to buy before we listed it. She was given a week, but decided not to. We pointed out that the purchaser would most likely be an investor and that she could not be kicked out as she has a lease. This seemed to help the situation.
I would get on the phone and let the tennant know ASAP.
hrm
Honesty is always the best policy! Have you discussed the option of selling the property to the tenents? Often they are keen, especially if you can do the deal as a wrap or lease option to them. Then it’s a win-win!
Pegasus.
Yep Pegasus – I agree
Wrap it if it lends itself to this – it could be a potentially lucrative option for you Geoff.
Luke Woollard
Licensee
Pacific Lifestyle Property
http://www.plproperty.com.aucomments made are general information only. you should seek professional advice for your particular circumstances.
I would love to Wrap a property some day,can you wrap in Western Australia??
http://www.owner.com.au/phototour/listing_phototour.cfm?listingid=20440
GeoffB,
Why is that you think the property is more for a owner occupier rather than for a property investor?
If it attracts tenants, I’m sure it may suit some investors. Anyway, just my novice opinion.
From FUN
Thank you all for your constructive feedback.
Great suggestions and ideas.
Cheers,
GeoffB
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