How to sell a rental property

Selling a tenanted property can be complicated, but it often makes a lot of financial sense.

That’s especially true if you’re selling in a suburb that’s popular among investors. Finding reliable tenants is a time-consuming activity, and so offering an investment property with tenants already in place can really sweeten a deal.

Add the extra rental income you will earn into the equation and the prospect of selling your property before the end of your lease agreement suddenly seems very alluring indeed.

So, how do you sell a rental property?

The required notice landlords must give tenants prior to showing around prospective buyers differs from state to state.

Let your tenants know

Even if you have no intention of asking your tenants to vacate the property, you need to let them know as soon as you decide you wish to sell up; in most states, you won’t be able to organise viewings until you’ve done so.

What’s more, news of a landlord’s intention to sell will likely leave a lot of tenants feeling uneasy, and so you’ll need to be as upfront and transparent as possible to maintain a cordial relationship.

Give notice prior to inspections

Each state also requires that you give tenants adequate notice prior to showing potential purchasers around the property. The required notice period differs from state to state.

ACT

Landlords must provide tenants a minimum of 24 hours’ notice, and tenants must grant “reasonable access to the premise” to potential buyers. However, if they haven’t previously received written notice of the landlord’s intention to sell, they have the right to refuse entry.

NSW

Landlords must provide tenants two weeks’ written notice before the first inspection. For subsequent inspections, the landlord should provide a minimum of 48 hours’ notice and conduct no more than two a week.

NT

Landlords are only allowed to enter their property between 7am and 9pm, and need to provide 24 hours’ notice to their tenants. According to the state’s Residential Tenancies Act, they must also “be reasonable about the number of showings sought”.

QLD

As in ACT, landlords in Queensland must give renters written notice of their intention to sell the property and provide 24 hours’ notice before entering with a prospective buyer.

Maintaining cordial relations with your tenants is crucial, as you’ll be counting on them to keep your property clean and tidy.

SA

Landlords must provide written notice of their intention to sell the property 14 days before they can advertise the property for sale, or show it to prospective purchasers. Before each visit, they should provide “reasonable notice” and specify a time between 8am and 8pm, on any day other than a Sunday or public holiday.

They can organise no more than two viewings every seven days, unless the tenant gives them permission to conduct viewings more regularly.

TAS

If they receive written permission from the tenant, landlords may show their property to a prospective buyer at any time.

Without approval, they may show the property to interested parties:

• on 48 hours’ written notice
• between 8am and 6pm
• no more than once a day
• no more than five days a week.

VIC

Landlords must provide tenants with 24 hours’ notice before showing the property to a prospective buyer.

WA

Landlords may show the property to prospective buyers between 8am and 6pm on weekdays, between 9am and 5pm on a Saturday, or at any other time agreed between the tenant and landlord, after giving the tenant “reasonable written notice”.

Consider offering incentives

Maintaining an amicable relationship with your tenants is crucial when selling your rental property, as you’ll require their cooperation to present your property in the best possible light.

Given that keeping your tenants in the property might also increase your sale price, it’s worth considering knocking $50 or $100 off their weekly rent as an incentive to stay put, help keep the property clean and tidy, and make themselves scarce during inspections.

Do I have the right to take photographs of the property?

Yes, landlords can take photographs and video footage to help advertise a property for sale, although they must seek written consent from the tenants to photograph or video personal possessions.

What should I do if I want my tenants to leave?

If you have a fixed term agreement in place, you cannot make a tenant leave if they are complying with the terms of the tenancy agreement. They are entitled to stay until the end of their term.

Of course, that’s not to say you can’t ask a tenant to leave; and if they consent in writing, you can terminate the tenancy agreement.

However, if the agreement is periodic, the landlord has the power to issue a notice to vacate the property. In these circumstances, they must adhere to legally required notice periods, which vary from state to state.

• ACT: if the agreement is periodic, landlords can evict tenants on eight weeks’ written notice.
• NST: if the agreement is periodic, landlords can evict tenants on 90 days’ written notice
• NT: if the agreement is periodic, landlords can evict tenants on 42 days’ written notice.
• QLD: if the agreement is periodic, landlords can evict tenants on four weeks’ written notice, once a contract of sale has been signed.
• SA: if the agreement is periodic, landlords can evict tenants on 60 days’ written notice if a contract of sale has been signed, and 90 days’ notice if a contact of sale has not been signed.
• TAS: if the agreement is periodic, landlords can evict tenants on 42 days’ written notice.
• VIC: if the agreement is periodic, landlords can evict tenants on 60 days’ written notice.
• WA: if the agreement is periodic, landlords can evict tenants on 30 days’ written notice if the contract involves handing over vacant premises.

SOURCE: www.realestate.com.au