we are listing our house for sale in early May, it is tenanted with the current lease expiring on the 25th June. we have to give notice now if we are giving them "notice to leave". but we are concerned with if the house doesnt sell for a few months we will have to cope with $1400 less in our budget each month if it doesnt sell straight away.
are we better off risking having our house empty while its on the market … or renew the lease and then cut out a section of the market that dont want to wait another 6 months before they can move in?
opinions appreciated
we are having trouble deciding.Hi,
I would sell it with but give them the option of vacant possession if they want to live there. It just means that you will have to try and get the purchaser to settle after you have moved the tenant on. Is it 60 days notice that you have to give? Many investors are very happy to buy with existing tenants.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeHi, sorry to hijack your post but am in a similar situation, we want to sell a tenanted property but (for unforeseen reasons) we signed a fixed lease and it is tenanted until next feb…is there any point trying to sell now or are we better off waiting until closer to then? We care keen to sell ASAP?
D i was under the impression that when the lease was signed I couldnt move them on until after the lease expires?
but i just had a thought – how about getting rid of the lease and offering the tenants a periodical payments agreement where its not a lease but they pay fortnightly. that way if the new buyer wants a lease he can offer them a lease, otherwise they can kick them out.
Ok so the lease expires June. You list start of May. That is two months. Will you get a buyer in 2 months? If so you get buyer to give you settlement that allows you to give tenants correct amount of notice, whatever it is in your state check with REA. So four months in total for instance. For sale to be finalized.I was under the impression that you just reverted to standard notice times after the lease expires because it then becomes a periodic tenancy.
Say you dont get a buyer for four months but all the feed back you are getting along the way (maybe 1 or 2 mths into it) is that people want vacant possession. Then you give appropriate notice at that point with as much info as you have. Then you have vacant possession to offer as carrot and will only lose out on a month or 2 rent.
If you want a quick sale kick them out now, try for quick settlement from buyer and move on.
I think you a in a whole load of mess trying to get around the lease by offering different things. Stick to what is in place already but try to make the most out of it. Get a property manager to advise you on required notice amounts then work from that
CJ – I would call three agents and ask if in your area they think they can sell with tenants or if you are better off waiting. They will tell you, then I would ring any others in town and ask them too. You don't know until you ask someone who is experienced in selling in your area. Look on RE.COM and see if properties in your area are selling with tenants or not at all.
Hope this helps.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email Meour current property manager says to not renew their lease. if i want them out at the end of their current lease i have to give them 2 months notice, plus 2 days postage. which is next week.
if i sign on a new lease i cant kick them out for another 6 months after they sign their new lease – which is the end of December
but i hadnt previously thought of periodic tenancy. i just googled and apparently its the same – 2 months notice. so that could work! better than having it sit for 6 months empty if i have trouble moving it.
Yep. Just don't sign them on a new lease get the PM to send out a letter stating they are now on a periodic tenancy as of the day current lease expires then you can do what you want (within law
.Good Luck
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email Methanks for your advice
that seems to suit our needs perfectly.I just bought a unit that had tennants in place.
They were on a expired lease, and the only notice that was required was 30 days + postage…
(From my understanding, standard notice is 60 days + postage, unless sale contracts have been exchanged and it then becomes 30 days + postage.)
In regards to if you should give notice to your current tennants prior to selling, if they were willing to assist in the sale of the property (allow open houses etc) then i would simply let them continue on a expired lease.
The advantage would be that if a home buyer buys the place, eviction is given and based on a 42 day settlement, any delays subject to vacant possesion would be minimal and it hasn't affected your cash flow.
The other advantage, if they are good tennants, up to date with rent etc, your Agent can use it as a 'sales pitch' to potential investors… tennants already in place, happy to stay and sign new lease etc etc
I would go with a periodic tenancy from 25th June. Let the tenant know that you plan to sell the house. If you get a buyer, you can do settlement in line with the tenants notice to vacate … sounds like a plan!!
Many buyers will find the idea of having a tenant in place an attractive idea so I wouldn't think of it as cutting out a section of the market.
At the end of the day, you have to do what suits you best financially. If you can't afford to have the property vacant while you look for a buyer, then a periodic tenancy is probably the best way to go.
CJ: If you need to sell the property sooner than next year, then sell it to investors only. You could also assess the tenant as to whether they'd be interested in moving on … according to WA law, a fixed term lease can be terminated if mutually agreed by both parties. If you tell the tenant you'd like to sell and they'll have to move, they may choose to go sooner rather than later … its worth asking. If they decide not to move on, then it depends how desperate you are to sell the property as to whether you choose to sell now as an investment with sitting tenant or wait until closer to the end of the lease and run the risks that 'karen' did in having a potentially vacant property losing money while you find a buyer.
My friend has just bought a property as her PPOR with a tenant in place, she simply wrote into the contract that tenants are to vacate on X date. She was talking about having tenant pay her their rent until lease was up but after settlement.
ie property settles on 2nd May, lease in place until 16th june, tenants' rent payments are transferred over from previous landlord to new owner as of 3rd may until the lease expires on the 16th June. Then tenant moves out and new owner moves in.
Could also write into contract for delayed or longer settlement that coincides with the expiration of the current lease. Give notice to tenants that lease will not be renewed, once you are sure that the purchaser is an owner occupier or not interested in renewing current tenancy.
Cheers
Sonya
To hedge your bets, sell with the tenants there on a month-to-month tenancy. That way, an incoming investor owner can offer them a new long-term lease or an incoming owner occupier can swiftly evict them. And if it doesn’t sell, you still have tenants!
One thing to consider is how your property conditions with tenant in there. With empty property you can do renovating, painting, fixing… ect, without hassle of asking very time. It is impossible to do painting while tenant still living in the property. Some small house keeping can change the price a lot, especially when buyer is owner occupy. People need to feel “home” when buy house for themselves to live. Depend on the market situation, a reasonable asking price and a tidy good property and good sale agent, it should not stay in the market for long.
Hi.
I was discussing this very thing with a friend yesterday, who got her property manager and real estate agent to advise her.
Her problem is, apparently, that the current tenants don't have the property presented particularly well, with boxes of stuff in bedrooms, mismatching bits of furniture etc. The agent said this would definately make it harder to sell, so that may be another issue you need to take into account (hopefully it won't apply to you, but thought it worth mentioning).If you keep the tenants during the sale, why not offer them reduced rent as a 'thank you' incentive to open the house whenever needed and to keep it presented really well? This could cover giving access for any repairs and gardening.
G
GeraldineM wrote:If you keep the tenants during the sale, why not offer them reduced rent as a 'thank you' incentive to open the house whenever needed and to keep it presented really well? This could cover giving access for any repairs and gardening.
G
It is the tenant's obligation (at least in Victoria) to provide access for sales inspections upon 24 hours notice. They don't deserve a reward for complying with this. But you could entice them to clean up the place with a few days free rent. I've done this before and it's worked a treat.
I find that the quality of the tenents makes a BIG difference. I inspected a property on the weekend – there were heavy metal band posters all over the walls, dirty dishes piled up on the sink, it wreaked of cigarette smoke and there were no beds – just matresses on the floor – not an environment for high sale prices!
yeah our tenants are fabulous. worlds best tenants i reckon. the house is always spotless and yard always mowed. gorgeous modern furniture. no clutter. and they have agreed to periodical payments so thats good
we wont be losing them after their lease runs out Hi again Karen and Kate.
Re tenant obligations to open for inspections, I realize this is the case, with appropriate notice. However I have personally inspected places with dirty undies on the floor and old cat food out etc. It can also be off-putting to have a sullen tenant sitting watching TV during an inspection, or an angry dog on a chain barking outside fit to bust. So I guess the idea of reduced rent is to provide an incentive for cooperation, especially as some tenants will not actually want you to sell the house they are living in!
G
we are having trouble deciding.
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