Buying PPOR with existing tenant - Q's to ask?

[neil100]

Hi all,

we have found a property that we might consider as our next PPOR.
It is an older property that needs quite a bit of TLC which we are happy to do.

It currently has a tenant in place until Aug 2011 and I think this is putting people off the property at the moment, and therefore poses and opportunity to purchase below market price.

What I am not sure of is the process to ensure the tenant leaves at the end of their term?

What questions should I be asking the REA to ensure the current set-up is ok, and that I am not going to be left with a stick situation?

I guess I should find out if

• a bond has been deposited, and if so, with who?

• 
  there is a contract / rental agreement in place?

What else would you want to know to satisfy yourself that purchasing this would be ok?

Thanks
Neil

 

[Propertunity]

I guess I should find out if

• a bond has been deposited, and if so, with who?

• 
  You don't get a choice - you have to lodge with the nominated govt. agency - rental bond board in NSW. You can ask to see a copy of the receipt though

• 
  there is a contract / rental agreement in place?

This must be attached to the contract of sale (by law)

What else would you want to know to satisfy yourself that purchasing this would be ok?

Ask to see a copy of the ingoing inspection report - compare this with the present state of the property.
Ask to see a copy of the rent ledger - this will show if they are paid up-to-date.

 

[meri]

Hi Neil100,

we bought a few years ago with a tenant in place. We did ask the managing agent (which was different from the selling agent) for as much good/bad detail on the tenant. We asked about how they looked after the house, rent regularity etc. Worked ok for the first year with this tenant.

If you intend to do major work, as you said it needed lots of TLC, this may be hard to do around an existing tenant. It is also hard to significantly raise the rent with exisiting tenant, when all the work done.

Cheers, Meredith.

 

[meri]

Hi Neil00

Just relised you want the tenant out. Sorry for my mistake.

If under existing lease you must abide with the end date. You could offer money to tenant to leave early or must wait. It is really important to give the correct number of days notice when giving notice to vacate.

Best of luck.

Meredith.

 

[neil100]

You don't get a choice - you have to lodge with the nominated govt. agency - rental bond board in NSW. You can ask to see a copy of the receipt though
This must be attached to the contract of sale (by law)


Ask to see a copy of the ingoing inspection report - compare this with the present state of the property.
Ask to see a copy of the rent ledger - this will show if they are paid up-to-date.

Thanks Alan,

I've just got a feeling at the moment, that the rental "agreement" might not be the standard type, or being managed by a PM. The owners, though are apparently in QLD, but the owners father lives next door.

The REA selling the place says we would need to give 90 day's to vacate, not sure if anything has changed with the new RTA laws - will need to check that out.

I'm waiting for the contract to be sent through to me.

Cheers
Neil

 

[neil100]

Hi Neil00

Just relised you want the tenant out. Sorry for my mistake.

If under existing lease you must abide with the end date. You could offer money to tenant to leave early or must wait. It is really important to give the correct number of days notice when giving notice to vacate.

Best of luck.

Meredith.

Thanks Meredith,

Yes, we would want the tenants out, and have been advised that we need to give 90 days notice.

thanks
Neil

 

[porp_e]

Thanks Meredith,

Yes, we would want the tenants out, and have been advised that we need to give 90 days notice.

thanks
Neil

This is only if the tenants are on a periodic lease but you mentioned before they have something in place until Aug 2011 which indicates a fixed term lease to me. Best to confirm with the realtor what type of lease they are on and then you will be able to ascertain the earliest that you could make them move out.

Here's a link to the current rules for NSW: http://www.fairtrading.nsw.gov.au/T...ng_a_tenancy/Giving_a_termination_notice.html

Best of luck with it all

 

[morg]

Just specify that you need vacant possession on settlement.
Why take on this issue when it doesn't need to be yours to deal with.
Let the vendor deal with it.