Ins and outs of buying a tenanted property

There can be big benefits for investors in buying an already tenanted property. But don’t forget to consider both sides of this opportunity, as well as exploring the fine print and particulars. 

From high goals…

One of the most difficult – and longer lasting – issues in landlord life is finding a great tenant. So, finding an already tenanted house is a big relief. A great way to begin an investment collection, a tenanted property can save you time and money. You’ll be enjoying cash in your pocket from day one of your purchase instead of advertising for new tenants and then watching time slip by while your bank account shrinks. As well, the house will be legally up and running to rent, with no immediate refurbishments needed. So, essentially, you can sit back, relax and feel chuffed about your great new investment. Or can you?

To lower points….

There’s always a chance the vendor wasn’t dotting all their i’s or crossing every t with this property. As a result, you may have to spend precious time and money fixing these issues. Then there’s your tenants.  If you want to see new people move in, for any reason, you may not be able to do so quickly or easily. You may need to search more thoroughly for a conveyancer or solicitor as you want the legalities signed off by someone experienced in handling the purchase of tenanted properties. 

First things first

Double-check your potential new home’s lease agreement. As real estate agents, we’re usually able to tell you this type of information, whether it’s a periodic or fixed-term lease, when the lease ends and any special conditions. A copy of the lease and similar information should be included in the vendor statement. Remember, for fixed-term agreements with a set expiry date, tenants can’t be forced out of the property. As such, you have to agree to the current rental contract. For periodic agreements, which are highly flexible for both landlords and tenants, you can request the property be vacated on a particular date. But you must still give the tenant a notice period of around 60 days, depending on where you live. As well, ask us more about the tenants. Do they pay their rent on time? Have they ever badly damaged the house? How long have they lived there? Are they keen to have their lease renewed? Again, we can often explain the tenant’s wishes; alternatively, just ask us. We encourage you to also research the neighbourhood and find out more about vacancy rates, rental values and similar. 

Money factors

Use your settlement period to transfer bond, tenancy, and rent details to your name as every cent of the rent will be paid to you as soon as settlement is complete. The current bond will stay in place but you will need to notify the relevant authorities of the change of ownership.

chrisbrown1224

Managing Director – New Vision Financial Services & New Vision Real Estate After years in the banking, finance & commercial sector Chris noticed that the industry needed a company with a personal touch that offered their customers a complete solution. In 2015 New Vision Financial Services was created to allow our consultants to use their experience (including approving and structuring large complex commercial transactions through to basic home loans) and to concentrate on offering a personalised service to their clients. With the growth and success of New Vision Financial Services a decision was made in 2019 to launch New Vision Real Estate to provide an end to end solution for client weather they be first home buyers or seasoned investors. Chris has built a team at New Vision Financial Services and New Vision Real Estate that have access to over 70 different lenders, insurers, lawyers, accountants and financial planners giving you more flexibility when making a decision. We offer a full service Real Estate agency offering Sales, Leasing, New Developments, House & Land and Commercial. Call me anytime on 0433 181 544 or email chris@newvisionfinancial.com.au The team at New Vision Financial Services have access to over 70 different lenders, giving you more flexibility when making a decision. Our consultants have had extensive experience within the banking, financial and corporate sector. At New Vision Financial Services we specialise in finance lending for home, investment, business, commercial, asset, debtor and many other requirements. As New Vision Financial Services has progressed, we have developed strong relationships with professional service providers such as; Financial Planners, Accountants, Settlement Agents, Leasing & Equipment Providers, Debt Management Specialists and any more to allow our clients access to a complete suite of services.