Everything you need to know about selling a tenanted property in NSW

Everything you need to know about selling a tenanted property in NSW

December 4, 2023 | by DiJones

Selling tenanted property can be a unique proposition in the real estate market. While it may come with a specific set of challenges, it also offers opportunities that vacant properties do not.

This article explores the best strategies for marketing, negotiating, and closing the sale of your tenanted property, while adeptly managing the legalities outlined in the New South Wales tenancy laws.

Marketing your tenanted property

Targeting the right buyers

Effective marketing of a property with tenants hinges on pinpointing prospective buyers who recognise the value of an investment property. Targeting investors in search of immediate cash flow should be a priority, as they’re typically the most suitable candidates. These buyers appreciate the seamless transition and the economic stability an existing tenant can offer. By emphasising the steady income and minimal disruption in rental cash flow, you can make your rented premises stand out as an attractive investment opportunity. Highlighting the benefits of a tenanted property

When it comes to advertising a rental property with existing tenants, it’s crucial to showcase the property’s income-generating capacity. This encompasses the immediate rental income, which continues to flow from the day the new owner takes over, as well as the benefit of dodging vacancy periods that often follow a property sale. The advantage of purchasing a leased property - one that already comes with a proven income record and an existing occupant - can be a compelling draw for the potential buyer. By strategically positioning these elements in marketing efforts, sellers can directly align with the investment-centric priorities of prospective buyers. Managing inspections and open houses

Respecting tenants’ rights during house inspections and open houses is of paramount importance. Sellers must engage proactively with those who live in the property to negotiate agreeable inspection times, finding days and times that cause minimal disruption to the tenants’ routine and allow the property to be showcased effectively while upholding the tenants’ comfort and privacy.

Negotiating a sale with tenants in place

Discussing vacant possession with tenants

When you intend to sell and know that vacant possession might be a preference or a requirement for prospective buyers, it is wise to talk about this with your tenant early on. Informing the tenant of your intention and explaining that you may have to request them to vacate the property allows for transparent dealings and helps manage expectations. Early discussions about the prospect of providing vacant possession ensure that tenants are adequately prepared and can pave the way for smoother negotiations when the time comes. Offering incentives for early termination

If you sell your investment property and vacant possession is required, landlords may find it advantageous to offer incentives to tenants for an early termination of their lease. Whether the tenant is on a periodic lease or a fixed lease, incentives like rent reduction or a negotiated financial reward can encourage a tenant to vacate the property sooner. Such offers are particularly effective when communicated transparently, understanding of the tenant’s need to find new accommodation. Assisting tenants in this transition not only makes it less difficult to terminate the lease but also maintains a positive relationship, which is beneficial during the property handover to new ownership. Reaching a mutually agreeable outcome

The ideal conclusion to negotiations is one that considers and meets the needs of both tenant and buyer. Skilful negotiation, focusing on clear communication and fair compromise, can lead to a satisfactory agreement for all involved.

Tips for selling a tenanted property successfully

Working with an experienced real estate agent

Collaborating with a real estate agent who has a robust track record in advertising properties with sitting tenants can prove invaluable. Such an agent brings not only expertise in navigating the complexities of the Residential Tenancies Act but also in ensuring all parties reach a consensus. They serve as a mediator to align the expectations of sellers, tenants, and prospective buyers, providing tenants with the necessary written notice and facilitating a smooth sales process. Being transparent with buyers

Transparency is crucial when engaging with potential buyers, especially regarding existing lease agreements and the current state of the tenanted property. Clear communication of these details helps to foster trust and can streamline the sales process, making it more efficient for all parties involved. Providing thorough information upfront ensures that buyers are well-informed and can make decisions based on accurate representations of the property’s condition and tenancy status. Communicating effectively with tenants

Effective communication with tenants is essential throughout the sales process. This involves providing tenants with timely written notice about showings and any changes that may affect their tenancy. Respecting the guidelines set forth by the residential property law helps maintain a good landlord-tenant relationship and ensures legal compliance. By keeping tenants well-informed and acknowledging their rights, landlords can encourage a cooperative atmosphere, which is crucial for a successful sale.



When the time comes to sell an investment property, making reasonable efforts to respect an existing tenancy agreement is as crucial as the marketing itself. When vendors and their agents engage in clear communication and legal diligence, they lay the groundwork for all parties to reach an agreement that considers everyone’s best interests. Selling a rental property with tenants can be a seamless process, especially under the guidance of an experienced agent. Ultimately, a sale that benefits all involved is not just the goal but also a significant achievement for any property investor.

DiJones Real Estate, together with their directors, officers, employees and agents have used their best endeavours to ensure the information passed on in this document is accurate. However, you must make your own enquiries in relation to the information contained in this document and seek advice from your financial advisor, broker or accountant to ascertain its application to your circumstances.
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