should you sell with vacant possession or with a tenant still in place?

Jhai Mitchell

You have decided, for whatever reason, that you need to sell your investment property. Now comes the time to decide if you should sell with vacant possession or with a tenant still in place?

Should you sell with vacant possession or with a tenant still in place? We look at the advantages and disadvantages of both scenarios.

Vacant possession

This means that you put your house on the market with no one living in it, and with all furniture and removable items removed.  
The advantages include:
•        The property will be attractive to owner occupiers and, depending on the type of property it is and where it is, this may open up the market to more buyers.
•        Any people looking will be able to more clearly visualise their own furniture in the property.
•        Interested buyers know that they can move in as soon as settlement occurs without having to move an existing tenant out.
•        Inspections can occur as soon as a potential buyers wants them to.
The disadvantages include:
•        Potential investors may think it is un-tenantable.
•        You will have to have a period of time without income, which may cause financial strain to you, especially if the property subsequently sits on the market for a long time.
This means that you either stay in the property yourself in the case of an owner-occupied property, or you place the house on the market while there is still a tenant in place.

The advantages include:
•        Potential investors are often happier knowing a tenant has been secured.
•        A house can feel a lot more welcoming if there are people living in it.
The disadvantages include:
•        The tenant may make it difficult for inspections to take place, although only 24 hours notice needs to be given.
•        A tenant may not be keeping the property tidy and it may not look as attractive.
•        Owner-occupiers may be precluded, especially if there is a long lease in place.
Deciding which way to go?
Find out who is most likely to buy your property – is it more attractive to owner-occupiers or tenants? Then work out how long you can expect the property to be on the market (real estate websites provide statistical data about the length of time properties in areas stay unsold) and how much discounting is needed for them to sell. 

Knowing this will help you to establish if your individual property is better made available with vacant possession, or occupied, and whether you can afford to leave it untenanted for long enough to get it sold.