Selling an investment property while tenants are living in it requires some extra planning. From understanding tenancy obligations to arranging viewings, there are several things to consider before putting your property on the market.

With the right approach, you can protect your investment, maintain a positive relationship with your tenants and work towards a successful sale.

Sell with tenants or seek vacant possession?

Your first decision is whether to sell the property with the existing tenancy or aim to have it vacant before the sale.

Selling with tenants in place may appeal to investors looking for a property that already generates rental income. It also allows the tenancy to continue under the new owner, subject to the existing agreement.

Selling with vacant possession may appeal to a wider range of buyers, particularly those wanting to live in the property themselves. However, ending a tenancy takes careful planning and must follow the relevant legal requirements.

Your local EVES salesperson can help you assess your likely buyer market and decide which approach best suits your circumstances.

Understand your tenancy obligations

Selling a property does not automatically end the tenancy. The notice requirements depend on the type of tenancy, the reason for ending it and the circumstances of the sale.

For example, a periodic tenancy may be ended with 42 days' written notice in certain circumstances where an unconditional sale agreement requires vacant possession.

If you're intending to market the property as vacant, a periodic tenancy may be ended with at least 90 days' written notice.

Fixed-term tenancies have different rules and generally cannot be ended early simply because the landlord wants to sell.

Before making plans, check the current requirements with Tenancy Services or seek legal advice.

Communicate with your tenants

Clear communication can help make the sales process easier for everyone. Landlords must notify tenants in writing when the property is being put on the market.

Explain your plans, outline the likely timeframe and discuss how viewings will be arranged. Tenants may be concerned about disruption or what will happen if the property sells, so keeping them informed can help avoid misunderstandings.

Arrange access and prepare the property

Landlords and salespeople need the tenant's permission to enter the property for sale-related activities, including photography, valuations and viewings.

Tenants may place reasonable conditions on access arrangements, including how viewings are conducted.

Agree on suitable viewing times and discuss photography and presentation before marketing begins.

Although you may have less control over presentation than with a vacant property, addressing maintenance issues, highlighting the property's best features and planning photography carefully can help attract buyers without creating unnecessary disruption.

What happens when the property sells?

If the buyer intends to keep renting the property, the existing tenancy generally continues under the new owner. The change of ownership does not automatically end the tenancy, and the new owner takes over the landlord's responsibilities.

If the buyer requires vacant possession, the tenancy must be ended lawfully and the sale agreement must reflect the agreed arrangements. Your salesperson and solicitor can help ensure the appropriate steps are followed.

Planning your next move

Selling a tenanted property does not need to be complicated, but it pays to plan ahead. Understanding your obligations, communicating with your tenants and choosing the right sales strategy can help you avoid unnecessary delays.

If you are considering selling your rental property, talk to your local EVES Property Manager or EVES salesperson about your options and the best approach for your circumstances.