To sell as a rental or empty?

Hey everyone!

I'm planning to sell my townhouse in the next few months and I was wondering what would fetch the best price, a rental or an empty townhouse?

I'm hoping for around $430,000 and the rental would be between $400 and $450 a week if I decided to sell it as a rental. I'm moving in in a weeks time to do some cosmetic reno's and then either moving out and renting it out or I'll continue to live there until it's sold.

The townhouse is a 2x1 in Mosman Park, WA

What do you think, empty or rented?

Thanls!
 
To me it is a no-brainer. Move in, do your reno, then dress it nicely and market it while you are living there.

You don't lose the people who aren't buying it for a rental, and you can still get a rental appraisal to show anyone wanting to buy it as a rental what sort of rent it would go for.

No issues with tenants not allowing access or leaving it messy.
 
Absolutely what Wylie said.

If you sell it with tenants you are potentially excluding 80% of the market- the owner occupiers.
 
We have sold IPs both ways (with and without tenants), and it is very much up to the tenant as to how successful the process is.

In one case we obtained top dollar as the tenant was fastidious and presented the property beautifully.

In the other case, we decided to sell towards the end of the lease (to appeal to both investors and owners) and the tenants had always been neat and tidy. As soon as the property went on the market the tenants did everything they could to present the property poorly, and almost certainly cost us $$$.
Marg
 
If you sell it with tenants you are potentially excluding 80% of the market- the owner occupiers.

Precisely my thinking recently when I bought a property with a tenant in it with 10 months to run. The tenant was just a bonus for me as an investor, not a deciding factor, but in my negotiating, I was thinking in the back of my mind that a lot of potential buyers are probably not interested if they are wanting to move into it straight away so saw it more as a plus for me as a buyer.

And as others have said, tenants won't present it the same way you will to maximise the appeal.
 
I (almost) just sold a rented house and for my area excluding 80% of potential buyers is an understatement, it was more like 95%. Its amazing how tenants scare off buyers :eek:
 
Nope. With the sale of this IP hopefully by 2 or 3 more where I can add instant CG.

Thanks for the answers guys!

Can't you just pull the equity via loan top up or line of credit, once taking into consideration agents fee's, legals, CGT i think u will be behind the 8 ball if you do the sell then buy again thing

Let me know ur thoughts

REgards,

RH
 
Went on a property inspection this weekend. Just for fun - not really interested or cashed up to play, but wanted to get a "feel" for what this type of property in this location was "doing".
Chatting to agent later was told the tenants had tried to buy and their finance had fallen over.
ARRHAA! that's why the place looked like a total tip. Best way to put off another buyer is to make the place look as dirty, run down and awful as possible.
I recently bought something with a tenant in place. Again, the place looked filthy, which worked in my favour as not everyone can see past the crud. I got a good price because competition was low. Tenant has now done me a favour and given notice to coincide with settlement.
Next week I'm in there sleeves rolled up spilling some sweat doing a quick cosmetic reno and upping the rent $160pw!!
Thanks for coming!
 
Looking at selling also

Hi all,
Im glad this subject was raised, as i am in a similar situation and both have their positives and negatives.
I have a rental property and am looking at selling in the new year. I have renters there at the present and was not sure whether i should leave them in there while the whole 6 wk campaign is on, but i guess that there would have to be some sort of compromise as the tenants lives would be disrupted. So possibly a discount on the monthly rent might suffice.
Or i could kick them out, do alittle tidying up and put the place on the market. But my query is..........would it be somewhat silly having the house vacant till settlement as it could be a 3-6 mth settlement depending on the highest bidders circumstances, with no rental income?
Would love your imput on the matter.

John
 
you lose control of the sale by having tenants in. My experience was tenant didn't want homeopens. She would leave her usually tidy house in a mess. Only agree to do homeopens at rediculous times like 6.00pm Sundays. Stopped mowing and watering lawns. She had promised to fix the chips in the painted walls, but ended up doing a bodgy mismatched, unprofessional paint job and the place looked shocking. (while she was making a mess of my house, she paid a professional painter to paint a bedroom of her new rental - grrr) Not worth the stress.
 
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Great thread, i will keep this in mind.

Better to loose 3 months (or even 6 months) rent rather than loose on the selling price.
Three months rent would normally be a tiny percentage of the property value.
And while your at it and now have access to the place, a good clean, paint, carpet, some new blinds.... :D

Had a property sold by a family member recently, and if that had been a rental it might not have sold for the asking price. The final buyer inspected numerous times, generally with no notice and odd hours. (obviously not an investor)
 
Can't you just pull the equity via loan top up or line of credit, once taking into consideration agents fee's, legals, CGT i think u will be behind the 8 ball if you do the sell then buy again thing

Let me know ur thoughts

REgards,

RH

Sorry havent visited this thread for a while!

I was under the impression there would be no CGT as it has been my PPOR for 12 months and a rental for 11? I had no other PPOR when it was being rented.

I have sold 3 houses for what I would consider a good amount (in regards to the vendor) myself including once 4 or 5 weeks ago so will be trying to sell myself to begin with. If that doesnt work I will most likely rent it out again and as you said pull the equty out.

My loan is with HSBC and at the moment they are only allowing existing loans to 75%LVR. Would really prefer to sell if the price is right.
 
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