Plan Before You Act
Selling your investment property is a significant undertaking and you want to get the most out of it. Our trusted agent Stefano Pribac, who is specialised in selling apartments, has one important message and three tips for you. Here is what he has to say.
Hi. My name is Stefano Pribac and I’m responsible for the sale of established properties here at Motion Property. In most cases, this means that I service our landlords with the sale of their investment property. To all of you, I have one important message which is ‘Plan Before You Act’.
All too often I come across landlords who get in contact with our office, seriously considering selling, and they do that when the lease is about to expire, as soon as the tenant has given notice, or even worse, when the property has just been released or a new tenant has been put into the property. In many circumstances, this results in a marketing campaign, a sales campaign, or a property being sold vacant. This might be advisable in some cases but I’m more concerned about your investment. In the current market, it might take up to three months for a property to be sold. when the campaign is done with a vacant possession this counts as a significant loss of rental income for you. I’m pretty sure this is a very big problem for every investor.
Now, I have a number of things I would like to outline and I’ll do it fast.
Number one, in Victoria, we have a document called Vendor Statement Section 32. This document must be presented to any buyer interested in making an offer on your property. Your legal practitioner or conveyancer will prepare it and this will take about four weeks to a month. So we cannot go on the market until this document is actually available. Therefore we need to account for this time before we can actually actively market the property.
Number two, consider your leasing agreement. Be aware of the time left on your agreement with your tenant and don’t rush on any conclusion. Our property manager will be in contact with you three months before the lease expires, and that’s when you should start to think about your options. Unless you’re 110% sure that you want to release your property for another 12 months, take your time to make a proper decision. At the moment, as I mentioned, there are more owner occupiers in the market. Therefore you can understand that by releasing a property for 12 months will be considerably impacting the sale of your property. You would be only able to cater for investors, which at the moment are the minority and they’re currently also looking for bargains, which means that we hit the market, an investor comes through, they’re likely to put through a low-ball offer.
If you haven’t planned to sell but are thinking of potentially selling, instruct your property manager in order to move the tenancy to a month-to-month periodic term. In this case, you’ll be able to cater for both. You’ll be able to satisfy the majority in the market, the owner occupiers while keeping an ongoing rental income for yourself. In this case, we can then create competition that in return will bring better offers to your property.
Number three, consider your tenants. The tenants are a valuable source of income for you and they’re more likely to be affected by the sale. I take great care in dealing with them because ultimately they’re are the one who will allow for inspections, and the manner in which they will present the property will likely impact the sale price as well. There is going to be a difference of course if we sell a property that is tidy, or one that is messy. So please, every time you think of selling, consider doing that towards the end of the lease agreement rather than at the very beginning.
In conclusion, allow three to four months to prepare the documents. Launch the property onto the market. Run the marketing campaign. Negotiate. Sell!