There is much more to consider when selling an investment property than simply deciding who your agent you be and how much you will list the property for. You need to consider:

• Tax implications,
• What possession you will offer (i.e. vacant possession or subject to a tenancy),
• Arranging inspections when a tenant is still occupying the property.

Tax

Investors who purchased after 20th Sepctmber 1985 are subject to paying
Capital Gains Tax (CGT) when they sell a property or other capital appreciating asset. Before selling we recommend that you discuss the tax implications with your accountant and also with us. Idelly you will have considered the tax implications when you purchased and set up suitable structures to minimise your tax liability. If you haven't done this already we can assist in determining the best structure for your situation including Joint Tenancy or Tenants in Common, a company or trust.

The ATO Investment Essentials site has a wealth of information on taxation of investments both during the time you own property and when you sell.

Selling with the tenants in place or vacant possession.

An investor wanting to purchase a commercial or residential rental property will usually be attracted to a property that has a good long term tenant in place. If you have a good tenant who wishes to stay on the saleability of the property can be increased. If there is a current unexpired tenancy agreement then you must sell subject to the tenancy so the purchaser must take the tenant along with the property.

The other side of the coin is that you may restrict the market for your property as buyers who want to move in won't be interested in buying if they can't get possiession on settlement. The current state of the sales market and the number of investors looking to buy can help determine if you should keep the tenant or not. Your real estate agent will be able to help answer these questions.

A property with an expired tenancy agreement gives you more flexibility. A buyer wanting to keep the tenant can do so while a buyer who wants to move in themselves can do so as well. All you need to do is to terminate the tenancy prior to settlement. Talk with your property manager about terminating the tenancy so that the tenant is able to find another property and move out in time for settlement.

Inspections

Tenants have extensive rights under their tenancy agreements. Residential tenants must be notified that the property has been placed on the market and they must be given "reasonable" notice prior to inspections. Most tenants will cooperate however it is a disturbance to them so a softly softly approach is usually best.

Many agents will recommend open house inspections at a fixed time. This gives the tenant reasonable notice and only disturbs them for a short time each week. Private inspection outside this time can be arranged at mutual convenience. Of course, if the tenancy agreement is still in its fixed period then there should be no problems as the tenants tenure is secure for the period of the agreement.

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