Selling with 9 months on lease to go

[Elke]

Selling with 9 months on lease to go

Hiya
We are selling a 2BR T/House - the question is: this Spring or 2014 Spring?

We tried at Easter time to sell it but only got low offers (30k below similar in the area); it poured with rain every day of the opens, and in the end we took it off the market because it was empty for a long time and so we rented it out again. Unfortunately for a year lease - exp in May 2014.

We want to try to sell it again in September '13 but not sure if it's 'legal' so early in the tenancy? Plus such a long lease period would only interest investors, plus destabilize the tenant.

The reason we want to sell asap is because the price of homes in our desired area are going up so much more than our TH (in the same suburb and also where we want to buy). The TH has gone up by 10's of k's, but houses gone up by 100s of k in the past 5 years. So, by waiting another year to sell we are concerned that the gap between homes and the TH will be even greater.

We are currently renting elsewhere but really want to be in a home of our own with a young family!! And we can't unless we sell the IP!

That's why I'm writing here, to see if anyone has sold a place before with a long lease on it?
Cheers

 

[DaveM]

It will limit your market to either investors or owner occupiers with a longer move in horizon (eg they may have a lease to run as well on their rental or want a longer settlement to sell existing).

Transferring a lease to a new owner is not difficult to do. Where is the property located?

 

[RyanMcHarg]

May affect purchasers who are first home owners who miss out on stamp duty concessions if they have to wait over a certain time from to move into the house. I would say that could wipe out a fair chunk of your potential buyers, thus limiting competition.

Can you potentially offer an incentive to your tennants to terminate their lease early if you pay for the removal costs and waive their break lease fee, if it means the difference of a 30-40k saving on your next house buy purchasing now rather than in an upwards market, than surely it would be worth spending the $1K or so. Perhaps approach the subject with them to see if they would be open to it before putting it on the market, so you can provide the purchaser with the option of them leaving earlier if they want to move in, or stay on if an investor purchases.

 

[monalisa]

Draw down equity from the townhouse, to fund ppor deposit (non deductible debt), sell the townhouse in a year's time and pay down debt.

this will also save time, helping you secure a Ppor sooner than later.

 

[wylie]

May affect purchasers who are first home owners who miss out on stamp duty concessions if they have to wait over a certain time from to move into the house. I would say that could wipe out a fair chunk of your potential buyers, thus limiting competition.

Can you potentially offer an incentive to your tennants to terminate their lease early if you pay for the removal costs and waive their break lease fee, if it means the difference of a 30-40k saving on your next house buy purchasing now rather than in an upwards market, than surely it would be worth spending the $1K or so. Perhaps approach the subject with them to see if they would be open to it before putting it on the market, so you can provide the purchaser with the option of them leaving earlier if they want to move in, or stay on if an investor purchases.

I also think offering an incentive to move early if a purchaser wants vacant possession is a good ploy but I'd guess $1000 may not be enough unless the tenant was thinking of moving anyway. It could cost that or more to move so what is in it for the tenant. You could ask them their thoughts. We sold a house with prior signed agreement from the tenant that if the purchaser wanted vacant possession he would move out with four weeks' notice and not pay that final four weeks' rent. Win/win.

The issue of stamp duty is also valid but OSR was happy to allow a lease to finish as long as it was within 12 months from settlement (this is two years ago) but tenants could not be signed to a new lease nor could they stay month to month after the current lease finished.

 

[Brett R]

As discussed in the posts above, I would speak with the tenants. You might find that they would be happy to move earlier than the end of their lease. As an agent, I've negotiated with tenants a few times in this situation. In one instance the tenant requested $5,000. It was in the sellers best interests to do the deal so the money was paid to the tenant to vacate early.