Buying and Selling a tenanted property!
There are always two sides when it comes to property changing hands. If you are buying, someone else is selling.
The process of buying and selling property can be an unnecessarily stressful and sometime tedious process. Add to that a rental agreement and tenants and it can make the business a little more challenging. Thankfully however, your property manager is on hand to manage the [sometimes tricky] scenario of a rental agreement with the sale of a property.
A rental agreement does not have to end simply because an owner wishes to sell. In fact, marketing the sale of an investment property as already tenanted may be a positive for other investors. If you’re the one buying, you may wish to take over the tenancy and continue renting it out to current tenants.
If a fixed term agreement is in place, unless the tenant breaches conditions of the agreement, it will carry on as is. If a new owner wishes to end a lease, they must abide by the notice period specified in the rental agreement.
Regardless of on what side of deal you sit, there are some things to consider when buying and selling a property which is tenanted:
- Tenants must be advised of intent to sell, prior to the property being shown to prospective buyers.
- Opening the home for inspection will impact on current tenants. Written notice must be provided to the tenant, generally with a minimum 24 hours’ notice.
- Inspections may create inconveniences for tenants during this time. Be prepared for tenants to potentially negotiate decreases in rent or costs for maintaining property during this time.
- As an investor, make sure the appeal of buying a tenanted property doesn’t overshadow the property itself. Do the usual research on location, structure, future development etc.
- Speak with the property’s current property manager and have them advise on the current situation of the tenants and lease.
- Ask to view the current lease in place – in terms of length, additional agreements or anything outstanding from previous landlords.
- Check the rent rate is on-par with current market conditions.
Whether you are buying or selling a tenanted property, your property manager will be a valuable resource in making sure the process runs smoothly, with as little impact on not only the tenants but continuing to ensure the success of your property as an investment.
Fortunately, your property manager is also part of a professional real estate team, which means you also have direct access to sales and finance specialists. This entire team is dedicated to creating a stress-free real estate experience that delivers the outcome you want.