Tenant wants to buy rental property

I’m in an unexpected position of our tenant enquiring, through the property manager, if we are interested in selling. The Property is in regional NSW, has been owned for 8 years and we have thought about selling periodically over the past few years . The performance has not been stellar and the property is neutrally geared. The lease is due for renewal .We would negotiate and sell privately and only use our solicitor for the sale but I have read in other forums about agencies expecting a commission as they ‘introduced the buyer’ even though they are the tenant and the agency has done nothing in terms of selling the property. Can anyone give me some tips for this particular scenario as we are interested in selling but unprepared in terms of where to start. We have worked out the approx CGT liability to add to the complex task of working out a price...or do we ask them to make an offer first? Thanks for your opinions

 

A couple of things I would be doing first:

1.Check your management agreement with your PM to see if there are any clauses covering the issue of commission.

2. Doing lots of research into what the market price of the property is. I don't see how the CGT liability is more relevant to working out the price compared actually what you would get for selling it on the open market - you can then adjust based on personal circumstances if you wish.

 

Hi

If you have thought multiple times to sell the property over the past, it is best to sell now.

You have a buyer and everything can be quickly sorted out.

I think most of the thoughts are coming to you because you came across everything pre packaged.

Please note it might take even upto 3 months for you to sell your property (depending upon the regional location).

Because it is regional nsw, it is the ripple imho and thats why there might be a movement in pricing. So a good time to sell.

Regarding commissions, if the agent has come back to you, logically, they have brought the sale. You can negotiate and clarify with them then assume. I believe they do deserve the commission.

Regards

 

I agree the CGT liability has Nil to do with determining price. However before offering a property it is always wise to :

1. Estimate ACTUAL CGT liability
2. Determine actual selling costs and factor this into the CGT matters
3. Then determine the net proceeds after selling, paying agents and lawyers and the tax. What are you left with ??
4. If there are net proceeds what will you do with it ? ie pay down your own home ? etc...

 

I can't see how they would not expect a fee, ask them direct.

 

Are you sure the Tenants are able to finance the build? Would be a shame to go through all the rigmaroll only for them to b e knocked back by the current tightening of lending criteria.

I think the agent would look to get a commission, I don't exactly think its earned though.

 

Leave it open ended with the PM at this stage.
Tell them "Yes we may be interested in selling, what are they offering?". In the meantime do your own market research, work out what you would sell for. Don't ask this real estate what you should sell for as it would be like asking a barber if you need a haircut.
Don't spend time on the other stuff until they come back with something