Finding the right answer will be a delicate balancing act for any investor and one that requires significant consideration well before you erect the ‘for sale’ sign.
For some, how to sell an investment property will relate to cash flow so it’s likely your decision will largely be based on whether you can afford to have it vacant while it’s on the market and you wait for settlement.
Retaining the tenant
The most attractive reason for retaining tenants while the property is for sale is that you will be able to keep earning rental income. This will remove some of the time pressure and hopefully enable a higher price.
But be aware that if the tenant is on a periodic lease, they may decide to vacate at short notice and this could cause upheaval during the marketing period.
Selling while a tenant has occupancy can also throw up a few challenges, particularly when it comes to access and presentation.
Access to the property can become an issue depending on the tenants you have. For example, if the tenant is a shift worker and sleeps during the day it may not be possible to show prospective buyers through during daylight hours.
While tenants are required to provide agents with ‘reasonable access’ to a property that is for sale, some can be uncooperative and difficult.
In addition, presenting the property in a clean, welcoming state is important. Sometimes a tenant’s clutter, pungent cooking smells or the two bedrooms jam-packed full of Star Wars collectables or their 30-year teddy bear collection might not help to present the property at its best.
Having a tenant will also mean you have little to no control over presentation of the property, especially if the renters’ standards are not in line with your expectations.
Some tenants keep rental properties in pristine condition and invest considerable time and effort cleaning and tending to the gardens. But others, particularly share houses, can leave a lot to be desired when it comes to presentation.
It’s also worth remembering that even if tenants are helpful and generally tidy, their furniture and personal belongings may not showcase the property at its full potential.
Selling your investment without a tenant
Marketing a vacant home may make the property appear less welcoming, so there’s a good argument for having an expert “stage” or “style” the property with the right furniture and furnishings that makes the most of the space.
“Quite often after a property has been tenanted for a while it needs a bit of TLC, but the downside is that you’re not going to have a rental income for three or four months so cash flow could be an issue,” said The Haus Exchange proprietor Rasmus Nielsen.
“At The Haus Exchange, we understand that primo presentation can ultimately result in a higher sales price and that’s why we offer a complimentary styling service for new listings.
“The Haus Concierge service is an exclusive offering where we can arrange a staging consultation, organise quotes and coordinate the experts to make sure the property looks its best from the first day it hits the market.”
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