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BYO Tenant

Discussion in 'General Property Chat' started by Phil82, 27th Sep, 2016.

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  1. Phil82

    Phil82 Active Member

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    Hello there. I'm currently looking at purchasing an investment property. The property in question has tenants in place with a lease that expires in January. The problem I have is I have people that I wish to rent the property to(my Mum and Dad). The question I'm asking is whether it is ok to not renew the lease of the current tenants in January so that my Mum and Dad can then lease the property off me?
    Thanks in advance.
    Phil
     
  2. kierank

    kierank Well-Known Member

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    My understanding is Yes; all you need to do is issue a Notice To Vacate to the current tenants.

    If I am wrong, I am sure I will be corrected.
     
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  3. Stoffo

    Stoffo Well-Known Member

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    Or you could request vacant possession as part of your offer/contract.

    That way the existing owner/landlord/agent will have to be the bad guy and give the current tenant notice in time for settlement.
     
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  4. D.T.

    D.T. Adelaide Property Manager Business Member

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    You have 2 options essentially
    - Put vacant possession in your purchase contract
    - inherit the existing tenants, keep them til Jan and move parents in then.

    Depends on what your timeframes are and where you're currently up to in the process.
     
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  5. Tonibell

    Tonibell Well-Known Member

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    The tenants would be half expecting to be given notice once the place sells.
     
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  6. Phil82

    Phil82 Active Member

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    Thank you all very much for the quick response. The lease ending in January is actually pretty much perfect timing for our circumstances.
     
  7. albanga

    albanga Well-Known Member

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    You can purchase "vacant possession"? I had no idea about this.
    So what happens to the tenant and the contract they signed?

    What's the point of a contract if people can just be given their marching orders?
     
  8. Phil82

    Phil82 Active Member

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    I don't believe they can be given their marching orders. We would simply choose not to renew the lease at the end of it's term.
     
  9. thatbum

    thatbum Well-Known Member

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    As a potential buyer, you can seek to purchase the property with vacant possession, and then its up to the vendor to sort something out to get rid of the tenants in time for settlement.

    Could be something legit (paying out the tenants to leave early), or something not so legit (bikies), but as the purchaser, its not your problem.
     
    Last edited: 27th Sep, 2016
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  10. weejimmy

    weejimmy Well-Known Member

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    Are you allowed to rent to your parents if you use a mortgage to buy the house?
    I was told I can not rent to immediate family while I have a loan against the property. But this is on a UK property.
    Just wonderd if it's the same here.?
     
  11. D.T.

    D.T. Adelaide Property Manager Business Member

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    Can rent to whoever you want
     
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  12. Big Will

    Big Will Well-Known Member

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    Unless part of your SMSF there are restrictions.
     
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  13. D.T.

    D.T. Adelaide Property Manager Business Member

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    Wouldn't waste SMSF on residential props though surely?
     
  14. Big Will

    Big Will Well-Known Member

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    There are many thousands of Australians buying resi properties in their SMSF.
     
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  15. D.T.

    D.T. Adelaide Property Manager Business Member

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    Topic for a separate thread perhaps, but SMSF's advantages/disadvantages lend themselves more toward commercial property or other asset classes.
     
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  16. Big Will

    Big Will Well-Known Member

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  17. Big Will

    Big Will Well-Known Member

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    I completely agree with this and I/we have a SMSF but haven't and won't be buying residential properties in it.

    However the OP didn't say if it was in their personal name or within a SMSF so there could be restrictions ;)
     
  18. D.T.

    D.T. Adelaide Property Manager Business Member

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    I think you've done a disservice to the numbers there.

    You're saying there's 566K SMSFs, then saying 23% of the ones with directly held property assets were residential. That's 23% of those that have directly held properties, not 23% of SMSF's.
     
  19. Big Will

    Big Will Well-Known Member

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    Sorry I don't understand, can you explain further?

    566k x 0.23 = 130k
     
  20. D.T.

    D.T. Adelaide Property Manager Business Member

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    Its 23% of the SMSFs that have property in them have residential ones, not 23% of SMSF's.