If you own an investment property and want to sell, you don’t need to wait for your tenants to move out. In fact, many investors make the decision to sell their investment property while it’s still tenanted because it means the rental income is still coming in during the sales process. Having the property leased during the sale process can make it appealing to other investors because they won’t need to find tenants and they can see that the home is desirable.
Having said that, if you’re selling a tenanted property, there are rules and regulations to get your head around. Read on to find out more.
Always keep your tenants informed
When you sell a tenanted property your tenants retain occupant rights and need to be given plenty of notice. The process of selling a property may be disruptive and uncomfortable for them, so communicating clearly and making sure they are in the loop is essential.
With this in mind, you must work with your tenants through the process, to organise access to the property, and keep them up to date on what’s happening with the sale. You never know, the tenants themselves might be in a position to buy the home. The sooner you let them know what will be happening, the sooner they can start to look at their options.
Generally, we find that by communicating with tenants throughout the sales process they are cooperative and respectful when it comes to sharing the property with potential buyers.
What about property management?
Some sellers choose to take over the management of the property themselves during the sales process rather than leave it to a property manager. Doing so can certainly save you some money, but it can also up your stress. Some of our sellers have handed the property management over to us so we can handle this and the sale simultaneously.
What about the lease?
There are specific rules about the tenant vacating a property that is for sale or sold, and what happens if the rental agreement has to be broken. We are always happy to advise sellers here.
Generally speaking, if you have a fixed-term lease, the tenant is entitled to stay at the property until the lease ends. All this means is that if you sell your potential buyers need to understand that they cannot occupy the property until the allocated time.
For a periodic lease, the tenants need at least 60 days notice before they are required to vacate (if the relevant stipulation is in the contract. If there is no such stipulation, the tenants must be given 90 days notice).
Inspections and home opens
At some point, you will need to allow inspections for potential buyers. The South Australian rules that apply to Mount Gambier state that you’re not allowed more than two open inspections a week unless the tenant agrees otherwise. The tenant needs to agree on the time for the inspections beforehand, and inspections have to take place between 8:00am and 8:00pm. You also can’t conduct a home open on a Sunday or a public holiday.
For Sale signs
You have the right to place a For Sale sign in the front of the property unless the tenant can reasonably argue that it will interfere with their peace, privacy, or comfort.
Photos and videos
You are allowed to photograph and take video footage of the property for advertising purposes. However, your tenants may refuse to have their personal belongings filmed or photographed.
Overall, we find that if you communicate and stay flexible, the sales process should be relatively straightforward – and now is a great time to sell in Mount Gambier.
Thinking of selling a tenanted property in Mount Gambier? Give us a call today and we can talk you through your options.