Showing posts with label question. Show all posts
Showing posts with label question. Show all posts

17 March 2008

A Question: Better To Sell With Tenant Or Without?

I have a question for the readers out there. If you're trying to sell an 'investment property' is it better to do so with or without a tenant. I ask this because I see lots of examples (here, here and here and that's just this month) of sellers trying to sell property with long term tenants in place.

Here's another example a two bedroomed apartment in Woodstock looking for renters (asking rent R4 800) on the 13th of February and then a month later the same apartment is for sale (asking price R880 000), now with a renter in place.

I see two options here. Either the seller believes that an existing tenant will help it sell or the seller can not stomach the bond costs and needs a renter to make up the shortfall. If I were looking for an investment property buying an apartment with an existing tenant, especially a long term tenant would be a definite no-no for the following reasons:
  1. I would not have been the one to have vetted the tenant
  2. I would not have set the rent, nor any rent escalation clauses in the lease agreement
  3. I would not have set the length of the lease agreement
For those reasons if I were selling an 'investment property' I would sell one with no tenant, and if I were buying I would buy one without a tenant.

So dear readers correct me if I am wrong: Is it better for a property to be sold with or without a tenant?