Would like to ask other's opinion on leasing a house before settlement. Is it possible to propose the vendor to lease out the house while we are waiting for settlement. During the time, vendor can get income from rent and I will have tenant from day 1 after settlement. Has anyone has done this? Is there any concern I should be aware of?
I did this once and being a novice didn't do it right.
The owners actually asked me if they could do it (it had vacant possession on the contract). I said yes thinking the same as you.
It turned out they knew the leasing agent who just let it to the first ones who came in. They were hopeless, wrecked the carpet and I asked them to move out after 12 months. I actually rang the agent asking for input into the tenants and she said they can lease to whoever they like as it's their house. I stated they'd be hard pressed to get a tenant for 4 weeks as I had vacant possession. I should have backed out then and there. Oh hindsight!!!
The agent charged me all the leasing fees etc after I took over. I ended up changing agents.
Personally I would wait. Ask for permission to advertise for a tenant and let them in to look. Then you can still get a tenant from day 1 with the agent you want and the tenants you want.
I agree with catalyst. Hard to find a good tenant in so little time. I wasn’t even allowed to advertise the house while under settlement for a tenant to move in once settlement is over as I got told legally its not my house.
Best to wait after settlement for peace of mind and atleast then your in control.
As a vendor I would probably say no, they will have to pay (or forfeit) one or two weeks rent to the property manager to start the lease, they will have to choose a property manager, make sure they place is up to scratch for putting on the market; there's not really anything in it for them (obviously this all depends on many factors like location, type of property etc.).
Ask if you can get as much done during settlement to make sure it's ready from day one. Things like smoke detectors, water efficiency (if you want to charge usage), paint, cleaning, repairs, selecting a property manager. Then if you find someone at the first viewing who wants to move straight in, it's ready.
Cheers!
Oh, and hello this is my first post here! I'll do an introduction somewhere in one of the other sections.
I agree with other comments. Just wait and then after settlement find tenants that you want.
I'm in a similar situation. The vendor of the property I'm buying is being rented to her son. No lease and the contract is stated as vacant possession although he wants to stay on apparently. I do my own managing so i have the joys of trying to organise a lease agreement that starts on settlement day. With all of my properties they've already had tenants or being owner occupied. The owner occupied were very fussy about letting me get out property managers for a rental appraisal even two days before settlement when i was doing the final check.
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
Dark Night. Why not just let the vendor know you need a lease agreement before settlement otherwise you need vacant possession. She can get one drawn up in her sons name with her as the owner. Then at least if there is an issue you can legally get him out.
Let her and her son know what the rent will be so there are no surprises then he can decide if he wants to stay at that rent.
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