Selling with or without tenant?

Hi,

Just wanted to get a feel for the following:

If I was to sell an investment property, do, you think it would be better to sell un-tenanted or with a tenant already in place?

All opinions welcome.

Cheers,

PP
 
My Take on it

Hi PP

This is what I would do

Tennants out , do quick make over so its all nice and clean ( paint etc )

Then if you can afford it ( big if I know) get one of the furniture rental places to have a look and give you a quote on some furniture for the sale period .

I did this once to my PPoR by accident and it added 38k instantly , in fact when the first open day was on ( furniture added night before ) R/E add 20k to sell price there and then.

It constantly surprises me how much presentation actually does add to the sell price , which is what all those reno and lifestyle programs are really saying to us .

good luck lets us know how it goes

stuart
 
Hi PP

This is what I would do

Tennants out , do quick make over so its all nice and clean ( paint etc )

Then if you can afford it ( big if I know) get one of the furniture rental places to have a look and give you a quote on some furniture for the sale period .

I did this once to my PPoR by accident and it added 38k instantly , in fact when the first open day was on ( furniture added night before ) R/E add 20k to sell price there and then.

It constantly surprises me how much presentation actually does add to the sell price , which is what all those reno and lifestyle programs are really saying to us .

good luck lets us know how it goes

stuart

This is 100% correct and the ideal situation. Presenting the property for sale in this manner makes a BIG difference to the end sale price and overall interest.

Short of going to this extend, i would definitely make sure the tenancy is at minimum three months or less from ending. Anything more than this and nearly all owner occupiers will not be interested in waiting.

The other thing you must consider is the way the tenants keep the property. If you have tenants that do not help present the property well due to clutter/old furniture etc, you should consider waiting until the property is vacant if you can afford to.

Another thing to consider, who is the target market for your sale? If the property was returning some outstanding numbers and your sale is geared towards investors, a long tenancy would be a positive. This is often the exception rather than the norm, with the above being more likely.
 
Maybe the important thing is where the property is situated. If it's in a high demand rental area, then selling empty and 'staged' to hopefully get a better price might be preferable, but if in a low demand area tenants might be the go.
 
Interesting getting various views.
We have just purchased our 1st IP. Were happy it had an existing tenant (expired lease, now weekly) who has been there since Jan 09 with a good record through the PM.
We are setting up a 12 mth Lse with them
 
Do you know that research has shown that 'staged' properties sell for an average of 10% more $$ and in 50% less time?

So if these figures are true - absolutely worth vacating the property and furnishing it.

However, Rae is right - if it's a lower value property and cashflow is key, then you may be better off keeping the tenants in place.

If it's a mid-high value area, how about a quick reno and a part-staging of the property?

Part-staging is just furnishing a few of the areas - say the lounge, dining area, one bedroom and perhaps outdoor furniture. This is a great way to get the effect of a staged property but without the cost. Many staging companies will charge based on the size of property (2 bedroom, 3 bedroom etc...). Even if you have a 3 bedroom property you can get away with just staging one of the bedrooms. However, if you have spaces that are particularly small (say a small bedroom that you're trying to pass off as a double bedroom), then definately furnish this space. The trick is using small pieces of furniture (eg a small double bed, small side tables and lamps etc...) to make the room look bigger.

A simple but sharp reno can be quick to carry out and inexpensive if you do the right things. And add loads of value (and buyer appeal) to your property. I work with clients all the time advising what and how to renoavte their property for the biggest profit.

You could keep the tenants in place while you reno the exterior and garden and then when they move, get started on the interior. A good way to minimise the downtime on the property.

Plan the reno or anything you're going to do before the tenant moves out. It usually takes a bit of time to arrange trades-people/products etc... so give yourself the lead-time while they're still paying you rent.

Good luck!
 
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