There is a golden property on the market and you have your heart set on it. Upon further research, you have come to realise that the property is currently tenanted. In most circumstances, if a property has existing tenants with a lease, you’ll be taking them on too, at least until the rental agreement expires or you mutually agree on a revised end date.
Whether you are looking at this property as an investment, your next nest or just feel like the price and timing is right, this can be an inconvenience or a blessing. Either way, it can certainly be helpful to know more about this topic and a few things to consider.
Firstly, how do I find out the house I am buying has existing tenants?
If the property you are looking at is geared towards investors, an existing tenancy is often mentioned in the advertisement. Otherwise, this is something that we recommend asking upon initial contact.
Furthermore, the seller’s agent will generally be able to supply information relating to the lease, including the type of lease, regular rental amount, expiry date, and any special conditions of the lease.
Do I need to honour their lease arrangement when buying the property?
As a general rule of thumb, a lease will need to be honoured. Depending on whether the lease is on a fixed term or is periodic. This will determine what notice is to be given if you wish to gain vacant possession. It is important to note that there are times when the tenant may wish to vacate early. Terms can always be negotiated, although not forcibly enforced if they are in a lease.
What will my immediate responsibilities be once I buy a tenanted property?
After purchasing the property, you can choose to engage the services of a professional property manager. The property will probably already have a property manager in charge of the premises. You can choose to continue working with them or you can choose an alternative property manager. A property manager will be able to take you through the process of managing the property from settlement, ensuring this stays smooth with minimal disruption to the tenant.
You will also need to gain the contact details for the tenant and advise them on settlement of your contract for any ongoing queries. We also recommend considering landlord insurance.
Remember, this is a bonus
If you are an investor, looking to get a healthy return on investment without much leg work, this is your golden opportunity. A tenanted property for sale ticks all the boxes. Assuming that you are dealing with good tenants who pay their rent and look after the home, this can save some vacancy time and therefore ensure the property is generating an income straight away.
Are you at a loss about your property purchasing and settlement journey? That is why your team at Essence Conveyancing is here to help you. Contact us now.