Selling Investment Property

SELL BUY RENT MANAGE BLOG ABOUT TEAM CONTACT Buy  Rent  Sell  Manage  More  ? The Ultimate Guide to Selling Investment Property on the Sunshine Coast Qld in 2024 Are you a property investor on the Sunshine Coast QLD considering selling your investment property in 2024? Investors sell their investment properties on the Sunshine Coast Qld for many reasons. Selling investment property can be a complex process, but with the right guidance and knowledge, you can navigate it successfully. In this comprehensive guide, we will explore everything you need to know about selling your investment property on the Sunshine Coast QLD. From understanding the reasons for selling to determining the best time to put your property on the market, calculating the potential sale price, considering the costs involved, and strategising the process with your property manager and tenant, we’ve got you covered. Let’s dive in! Why sell your investment property on the Sunshine Coast? Right now in 2024, the most common reason investors are selling their investment property is due to mortgage stress. Which is understandable considering how much interest rates have recently risen. Other reasons range from investors needing to tap into the pro?ts they have made so they can purchase their principal place of residence. Retiring and wanting to put their money into super. Or simply reducing debt. You can read an article I’ve written about mortgage stress here. Kath & I have done that in the past. Selling an investment property and using the funds to substantially pay down the loan on our principal place of residence. We recently met with our ?nancial planner who is suggesting need to sell our current investment properties when we are about 85 years old, which is in about 30 years. Ideally investing in property is for the long term. However for the reasons listed above, sometimes property investors need to sell much sooner than planned. When should I sell my investment property on the market? When people contact me about selling their investment property often they are keen to get the property on the market very soon. Or at least understand what their options are. To understand timing, it’s a good idea to look at when the lease ends, when you need access to the pro?ts of the sale & also tax implications. Buy Rent Sell      Manage More

I have had investors who want to sell right away, while others are prepared to wait for the current lease to end to ensure they get the maximum sale price. What will your investment property sell for? Property investors usually want to know how much their property will sell for. When working this out what many real estate agents don’t seem to take into consideration is ; The lease end date The weekly rental income The property presentation The tenant’s cooperation Selling with the tenant in place or vacant Overdue maintenance Often a property investor can’t decide to sell until they have an indication of the sale price. Usually, they also don’t want to alarm the tenant or property manager during this research stage in case they don’t sell. A great place to start is having a remote sales appraisal. We use RP data to review the investment property online, then research other comparable sales in the area to give property investors an indication of a possible sale price. If you have an investment property on Sunshine Coast we can do this for you free of charge and usually fairly quickly. Just email me. From there the property investor can then decide if they are interested in pursuing selling further or hold. Cost of selling your investment property on the Sunshine Coast Qld Capital Gains Tax: Possibly the biggest cost is capital gains tax. This can vary and there are several strategies to have this reduced. Once you know a possible sale price you should speak to your accountant to see how this would affect your situation. I know a lot of investors who have been interested in selling to then realise it’s not worthwhile due to the capital gains tax they would have to pay. Agent fees: Agent fees vary. From as high as 3.3% inc GST to as low as 2.2% inc GST. A very common fee is 2.85% inc GST. So if your investment property sold for $700,000 the sales agent’s fee would be $19,950. This is paid to the sales agent on settlement. It comes out of the pro?ts of the sale and is usually covered by the buyer’s deposit so it’s an amount the owner doesn’t need to ensure they have set aside. Marketing: This can cost a property investor anywhere from $0 to as much as $10,000. A sensible average would be around $3,000. This needs to be paid upfront, however, many savvy investors now take advantage of a service called Campaign Agent which you can read more about below. While $0 marketing sounds tempting, one of the worst things a property investor can do is under-market their investment property when selling. Instead, they need to structure the sale to ensure they maximise the sale price. Solicitors: Around $1,000. What is important is you use a QLD-based solicitor as the laws here are very different to other states. This is usually paid on settlement. Every time a client of mine has used a solicitor that is not Qld based it gets complicated. Holding Costs: Costs to cover the repayments on the loan if the property is empty while it’s being sold. If you have a $700,000 loan with a 6.5% interest-only loan. You will pay about $11,700 interest over 12 weeks, while your investment property is being sold. Of course, ideally, your property should sell quickly but once it’s under contract the usual settlement period in Qld is 30 days. Even if it sells within the ?rst 4 weeks, you will need to cover the holding costs for that 4 weeks prior plus the 30- day period until it settles. Maintenance: Often investors just sell the property as is and are comfortable selling for less knowing the investment property could present better. If the investment property is over 10 years old most investors want to give the investment property a mini makeover, with new paint, updated fans, lights and gardens refreshed. The more move-in ready a property is the more it will sell for. Of course, this is optional. Loss of future capital growth: Recently my wife suggested we sell one of our investments. It’s old & tired but gives good returns. So I asked her. “Sure and what would we do with the money from the pro?t when we sell ?” She thought maybe we could move it into super. So we had a look at what our capital growth would be over the next 10 years which made her realise we would be nuts to sell. If you speak to a good investment advisor they can do long-term projections and they would base the capital growth of any investment property at just 2% PA. I mentioned earlier our advisor suggested we keep this property until 85 and he suggested at that age we would probably want all our wealth in cash or super. So when selling an investment property, it’s a really good idea to understand what you plan to do with the pro?ts and whether you be putting them to good use. Funding the costs of selling investment property: Almost all our clients now use Campaign Agent. They offer a service where they will fund the cost of selling and the owner needs to pay them on settlement, or in 6 months’ time, whichever comes ?rst. What’s interesting about Camping Agent is they will fund up to $25,000 which can include gardens, new fans, painting, new carpet, new lights, hire furniture, plus any real estate marketing and more. They charge a ?at rate of 6.9%. It just means this is money you don’t need to have to ?nd. CASE STUDY: Recently I had a client certain they wanted to sell. I supplied an appraisal, marketing costs, and my fees all agreed to. The tenant has given notice. Then the owners spoke to their accountant and discovered the amount of capital gains tax they would need to pay. Which put a stop to their selling plans. Speaking to an accountant is the ?rst place everyone starts to get an understanding of what this would look like, especially before giving a tenant notice. So with it empty they gave it a quick clean-up and re-leased it. But lost a few months with it empty while they gave it a refresh. Selling with a tenant in place Almost all real estate agents will tell a property investor. “Yes we can sell your property now with your tenant in place for a great price. Let’s take it to market”. Sadly agents say this because they just want your business with no real consideration of what the potential impact can be on your sale price.  Buy   Sell   Rent Manage More

Yes, any investment property can be sold with a tenant in place but ?rst, it needs to be looked into to see how much the sale price may be affected. Impact on the tenant: This is the tenant’s home. They don’t want strangers coming through, having to clean up, or even having to move. Tenants don’t want to hear that their home is going to be sold. Some tenants dig in and become very hard to deal with, some are very accommodating but even tenants that are happy to help can get tired of multiple open homes over a 4-week period. Legal Rights: Not all tenants and owners realise the tenant is legally protected by the lease. So if the lease doesn’t end for 8 months the tenant can choose to stay until then & most want to because these days it’s very challenging to ?nd a new home and even harder to be the chosen tenant of all the applications. If a lease ends in 8 months and you sell now. You can’t give the tenant notice to vacate sooner. However if possible you can mutually agree to end the lease sooner. Property Investors have rights as well. They have the right to sell their investment property and the tenant is not allowed to impede this. Some interesting things about legal rights are; Tenants can refuse open homes Agents can show the property Mon to Sat by sending the tenant an entry notice with 24 hours notice and the tenant can’t say no. An agent could show a property Mon to Sat twice a day with the correct entry notice, but a tenant is entitled to peace and quiet and they can make a complaint to the RTA of the inspections being excessive. Tenants don’t have to clean up Tenants don’t have to leave when an inspection is on Tenants have a lot more rights than property investors when a property is for sale. Property Presentation: Some tenants present properties beautifully in a ready-to-sell condition. Most tenants present properties in an OK condition, clean & tidy but often a little too cluttered to present the best they can. Tenants can’t be legally forced to clean up & even if they do agree their level of decluttering is different from a ready-for-sale condition. Before an investment property is put on the market the sales agent needs to inspect the property, to see how it currently presents and discuss the process with the tenant to see how they feel about assisting where possible. While a sales agent might be tempted to try and push the tenant around it’s much better to have a collaborative approach to get the tenant on side. I have seen some tenants be very hostile and purposely not clean up, leaving their barking dog home for inspections, making properties hard to sell. All this needs to be investigated before putting the property on the market. CAST STUDY: Recently one of our landlords decided to sell investment property through another agency. I found out the agency hadn’t ?rst inspected the property to meet the tenant and look at the presentation. Instead, they did a remote appraisal and listed it for sale before stepping inside and meeting the tenant. This was a great tenant, a lovely person, and pays rent on time. But he has a lot of stuff. A lot. The property didn’t present very well at all. As a result, the investment property was on the market for months, and the owner had to make a dramatic price reduction. It ?nally sold but only as the lease end date approached as the buyer wanted to move in. Unfortunately, the sales agent put the tenant, and the owner through months of trying to sell an unsalable property. If the agent had attended before listing it for sale they would have realised this at the start and could have made some recommendations to the owner. TIP: Once the owner decided to sell their investment property. The sales agent needs to attend the property, to review how the tenant presents the property. Some tenants’ presentations are fantastic, while others are so terrible the property is just unsellable with how the tenant presents the home. What could the agent have done differently? Often I tell owners, that with how the property presents it would be very challenging to sell and if they can wait for the lease to end they should. This is what this sales agent should have done. The owner would have sold for more money & while it would have meant he had to wait longer for his money. The property ended up selling when the lease was ending anyway. Lease end date impacting buyer interest: If a lease does not end for a considerable time, it’s fair to assume most of the buyers will have to be investors. What this means is the number of buyers will be dramatically reduced to only investors. Property investors also like to buy for as little as possible so they would more than likely want to negotiate hard for the best deal possible. So in a way, your investment property has 2 values. What it might sell to an investor and what it might sell to a homeowner. No one knows what the dollar difference would be. But selling to an investor is always less. Investors buy mathematically while homeowners buy emotionally. Offer subject to vacant possession: Buy Rent    Sell   Manage More

I’ve seen real estate agents stop sales by making the simple mistake of telling buyers there is a lease in place until x Which is 8 months away. Instead what they need to do is explain to every buyer if they are interested they should make an offer subject to vacant possession. A real estate agent’s job is to get offers and negotiate. By telling buyers this, doesn’t mean in any way they promise the tenant will vacate, but what it does is remove the obstacle of a buyer who wants to make an offer but thinks they can’t. If a buyer’s offer is low then nothing will happen. But if the agent can negotiate a high offer then it’s worth going through the process of seeing if the tenant would consider vacating early. Tenants are humans. I’ve had tenants tell me “Sure if I can ?nd a place I’d be happy to leave early” but it’s not that simple. If a sales contract is about to be signed subject to the tenant vacating before the lease end date. The tenant needs to be more committed than “Sure if I can ?nd a place” CASE Study: I recently sold a property that had a lease in place that ended in 10 months times. By telling every buyer they could make an offer subject to vacant possession it removed that obstacle allowing me to get several offers. Of these offers, I negotiated a price the owner was happy to accept. So I then had to negotiate with the tenant to see if they would consider leaving much sooner. The tenant agreed using the above phrase “Sure if I can ?nd a place”. So I had to explain they would need to make a commitment in writing and agree on a set date. This made them realise how serious this is & then weren’t that keen. So to motivate him, I had to offer to pay him for his troubles. Plus I had to organise a bond cleaner that he would pay for. Then as the date became close he still had not secured anywhere. So I had to organise that for him as well. The seller said “Wow the sale went so smoothly”, but she didn’t realise all the running around I had to do in the background it make it happen. Sure I could have told her but I don’t want any of my clients to stress. TIP: Some sales agents will advertise the lease end date in the advertising. While this is great for full disclosure, it can stop buyers who would like to live in the home from enquiring. My strategy is I explain that while the lease end date is in 6 months. If they like the home my advice is they should make an offer subject to vacant possession. Tenant access: Here in Qld tenants can choose to decline open homes. If they do, the sales agent is restricted to only be able to do private inspections. Which can be 6 days a week with just 24 hours. It’s my experience that even very accommodating tenants start by allowing open homes every Saturday. Then after 4 weeks, they want a break. TIP: I explain to tenants the choices are we can do one 30-minute open home on a Saturday or I can just do private inspections 6 days a week with 24 hours’ notice. Most tenants choose the 30-minute open homes. Rent reduction: You may want to consider offering your tenant $100 a week to assist, by allowing open homes. Cleaning up, and keeping the lawn looking nice. This would help them get involved. It’s not something I’ve ever had to do as I prefer to get the tenants on my side from the start. Break the lease without penalty: You can offer a tenant the ability to break the lease and leave without any penalties. Most don’t want to do this due to the costs of moving and the time to ?nd and apply and then be approved for another property. Often they will say “Sure if I can ?nd a place”, then they never do, as they don’t look or look and then realise how hard it is to get approved. How much do you need to offer a tenant to vacate before the lease end date? I still hear talk about offering tenants $2,000 to leave early. That number is really out of date. I have done this now recently a few times and the real number in 2024 is $10,000. You need to realise a tenant doesn’t want to move. They have to hire a removalist. They have to take time off work and the worst part is they have to apply for a lot of properties and go through the emotions of not being approved on many. While $10,000 might seem like a lot, what it means is the sales agent has to get $10,0000 more from the buyer, so the seller can fund this without feeling like they are out of pocket. With an offer of subject to vacant possession, there are a lot of things to consider. Before the seller signs a sales contract the tenant and the seller need to sign an agreement also that the tenant will vacate the property on settlement and the seller will pay them $10,000 once they do. Then you need to worry about what happens if they don’t vacate before settlement. What if they vacate the property before it is unconditional and the sale doesn’t proceed? Or what if they vacate way before settlement and the seller needs to cover the mortgage? All this needs to be considered. Extended settlement It’s my experience if a lease is ending soon & the buyer would like to live in the home. They don’t want the hassle of becoming a landlord for a short period. So usually they would want to secure the home with an extended settlement, where they settle a few days after the lease end date. I’ve seen sales agents make mistakes with this also. Where they settle the day the lease ends, which leaves no time for the property manager to do an exit report and ensure the tenant has vacated and the property is clean. If the tenant needs to come back they usually need a few days and then it needs to be checked again. Case Study: Recently I had another agency that I mentioned above, settling the day the tenant’s lease ended. Due to this, the owners got a dirty house. If the selling agent had made the settlement 7 days after the lease end date the new owners would have moved into a wonderfully clean home. When to tell your property manager and tenant I get a lot of people considering selling their investment property, to then learn the potential sale price is lower than what they had hoped. Sometimes investors check in with me annually for a remote sales appraisal. I had one investor do this for 5 years until the potential sale price was at a level a sale would make it worth their while. I recently read a high-ranking blog article that suggested the ?rst thing an investor should do is tell their property manager and tenant. That’s wrong. What this does is put the property manager and tenant on tender hooks worrying about an event that may not even happen. Like the 5-year example above, I have had other investors tell me they are going to sell in 6 months, the money is right, they are good to go, we are about to give the tenant a notice to leave, then 2 months from the lease end date change their mind.  Buy   Sell   Rent Manage More

It’s best to keep your tenant and property manager in the dark until you are 100% certain you are going to sell, you have chosen an agent and have a plan in place. It’s just common sense. Selling through the property manager or someone else Lots of property investors feel they should sell through their property manager. Which is understandable. They know the property, they know you and they know the tenant. But it’s likely, that the property manager or even the sales agent the property manager works with doesn’t have the years of experience to navigate the complexities of selling with a tenant in place or even selling once the property is vacant. I sell all over the Sunshine Coast. Recently I sold a property in Maroochydore. The owner had been talking to another agent who scoffed “He hasn’t even sold a property in Maroocjhyore” Sadly that’s the attitude of a lot of real estate agents. This other sales agent has no idea who I am, or how long I’ve been selling for. The ?rst property I sold in Maroochydore was in 2006. Probably the latest Maroochydore sale was in 2022 and now in 2023. Choosing a sales agent to sell an investment property is not about if they are local to the area. It’s about if they have the experience to negotiate with buyers, the experience to get the seller the best sale price, the experience to manage tenants during the sale and the ethics to always put the property investor ?rst. Nothing to do with the agent’s location or if they are the managing agency Selling just before the lease end date If the tenant presents the property well and is accommodating. Putting the property onto the market 2 months before the lease end date is a sensible strategy. This ensures the property investor is still earning a rental income while the property is for sale. While at the same time allows the property to be marketed to 100% of the buyers. Investors and homeowners. If the property is sold within the ?rst 2 weeks, most homeowners are comfortable having a slightly extended settlement that aligns with after the tenant has vacated. Notice to leave Your tenant needs to be given an o?cial notice to leave at some stage. The min notice is 2 months. However, if the property sells it can be as little as 1 month. As long as it’s in line with the lease end date. It’s slightly confusing so here are some examples. If a lease starts on the 1st March 2024 and ends on the 1st March 2025. The tenant can be given the notice to leave on the 1st of March 20205 any time from 1st March 2024 to 1st Jan 2025. This will ensure they get at least a min of 2 months’ notice. If the property is put on the market and sells on the 1st Feb 2025. The tenant can be given 1 month’s notice to vacate by 1st March 2025. There are other things to consider as well. For example, it’s best not to give a tenant notice until the sale is unconditional Selling at the lease end date: If possible it’s always better to selling investment property after a tenant has vacated. It will get the property investor a better result. The advantages of selling once the tenant has vacated are 1. The property can be cleaned up: It’s very common for investment properties to need a coat of paint, new carpet, fans and lights. 2. Styled if needed: Some investors see the value of the property being professionally styled. It’s a considerable investment but I have seen it over and over again. The value in having this done. 3. The sales agents have unlimited access. It allows sales agents to have multiple open homes and as many private inspections which can speed up the sales process. 4. Access to 100 % of the buyers, not just property investors: With no tenant, it now brings in buyers who are looking for a home. These buyers often buy emotionally & when this happens they often pay more. 5. No tenant involvement. Tenants are humans and this is their home. No need for the sales agent to be checking in if they are OK for a Friday 4 pm inspection or a Saturday 8 am one. Or arriving to ?nd the tenant has decided to stay home while the open home is being carried out. Or worse, not cleaned up. The disadvantages of selling once the tenant vacates are 1. Having to wait until the lease ends. You may need access to the funds before this. 2. No rental income while the property is on the marketing. 3. Having to fund the loan repayments while the property is on the market Case Study: I recently sold a property where it had been leased to two men. Nice people, paid on time. But men with a ?shing rod holder in the living room, and two dogs in the backyard. Clean but messy. The owners agreed it would be best to wait the 4 months until the tenants vacate. As the lease end date approached we put everything in place so we were ready to get the property on the market. Some touch-up paint, some gardening, furniture styling. Wonderful photos and within a week the house was on the market. We are really aware strains the investors now funding the mortgage so will be doing open homes twice a week and privates as needed to get a sale as soon as possible. While ensuring we structure the marketing to maximise the investor’s sale price. Notice to leave Your tenant will need to be sent an o?cial notice to leave with 2 months’ notice. This can take effect on the lease end date or afterwards but not before. What’s the process of selling investment property on the Sunshine Coast? I’m going to summarise what the process is for selling my investment property on the Sunshine Coast 1. I suggest that property investors start with getting a remote sales appraisal. This will give them an idea of what’s possible without freaking out the tenant or property manager. 2. Property investors should now check the impact of capital gains based on their situation. Rent Sell  Buy     Manage More

3. I review the lease end date & we discuss the pros and cons of selling now or after the tenant vacates. 4. The property investor reviews marketing options and my fees. 5. By now the investor should have an idea if they do plan to selling investment property and if it’s with the tenant in place or once they have vacated the property. ?. If you now plan to sell, I contact the property manager so I can attend the property to see how the tenant presents it & meet with the tenant as this would impact if you decide to sell now or when the lease ends. Of course, even if the lease end date is some months away and the property doesn’t present very well, but you need to go to market now. This can still happen, it just means you’d sell for less. 7. Usually, the property manager’s agency will now spring into action and try to secure the sale from you. ?. Depending on my review of the property, lease end date, tenant, and your situation. You decide if you take the property to market now or wait until the lease end date. 9. I liaise with the property manager and tenant leading up to the property going onto the market. 10. We agree on ?nal marketing, a pricing strategy & possibly any maintenance that may be required. 11. I work with the tenant to ensure smooth access to the property to show buyers. 12. When I get offers I don’t use offer forms. I get all offers written onto an o?cial sales contract. Then I will negotiate for you to help maximise the sale price. 13. I keep you updated along the way with the number of buyer enquiries. Feedback on prices. And of course offers. 14. Property sells. Conclusion If you are a property investor with an investment on the Sunshine Coast Qld. You are considering selling investment property. Please reach out to me. I would love the opportunity to give you a free sales appraisal and would love the opportunity to sell your investment. Byron Miller All Posts Recommended articles for you The Ultimate Guide To Selling Investment Property On The Sunshine Coast Qld In 2024 Sunshine Coast Short-Term Resales Hits 23% Due To Mortgage Stress Maroochydore CBD Private Hospital Has Begun  Buy Sell Rent Company Properties for Sale Recent Sales Properties for Rent About Upcoming Inspections Book an agent appraisal Upcoming Inspections Team Get an Instant Property Estimate Register For Property Alerts Blog Selling with Us Testimonials Manage Manage with us Switch to Asset Agents Property Management  Buy   Sell   Rent Manage More

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Selling Investment Property