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How to sell a property with tenants

4 July 2021

Photo by Chewy on Unsplash

You can sell the investment property at any time, including when it is tenanted. Selling a property with tenants can be financially beneficial for investors, but it does complicate things a little. Read on to learn the pros and cons of this choice and how the sale process can take place when the property is not vacant.

Is it a good idea?

Firstly you as a property owner need to decide if selling your property while it is tenanted a good idea. This decision hinges on a few factors:

How much time left on the lease?
Just because you decided to sell the property doesn't mean you can force your tenants to leave. If you need to sell the property by a specific date, you may not have the flexibility to wait until the property becomes vacant. If the tenants are on a fixed-term contract, you cannot terminate the tenancy early. The person buying the property will be purchasing the property with tenants and inheriting your current agreement. Once the agreement is up and becomes periodic, the new owner will need to provide the appropriate notice period to terminate the lease.

The owners of rental properties must give their tenants a proper notice and notice period before selling the property. After that, the property must be marketed within 90 days from the termination date. We have noticed from recent decisions made by the Tenancy Tribunal that it may be okay to advertise a rental property during the notice period. If you're unsure about your obligations and responsibilities, we suggest seeking independent legal advice.

What are your tenants like?
A good, reliable, clean tenant would probably be willing to help out with open homes, special viewings while making sure the property is tidy and presentable. On the other hand, a problematic tenant might be hard to work with to get necessary maintenance done to ensure the property is sold well and in the shortest time.

What is your property like?
Some properties are better suited to be rentals. An already tenanted property would appeal to investors looking to buy, guaranteeing returns from day one.

The pros and cons of selling property tenanted


  • Best for tenants. You get to sell the property, and the tenants get to keep their home.
  • Attractive to investors. If the property is appealing to investors, tenants are often welcome by prospective buyers. New owners don't need to start from ground zero. They're buying a viable investment that is an ongoing business. They don't need to do anything straight away, and the rent payments come in straight away.
  • Save money on staging and furnishing. Showing the property with the tenant's furniture may save you some money. It is often easier to sell a property when it's shown as furnished. It is easier for potential buyers to imagine what can fit where.
  • Earn money during the sale period. The rental income continues even during the sale and settlement period. So you get to continue earning money from your investment until the very last day.


  • Hard to schedule necessary maintenance and repairs. With tenants still living in the property, you must still give the correct notice period to organise essential works. This may not be easy to do if you're time-poor.
  • Tenants may not present your property as you desire. It is harder to make sure the property is presented exactly how you would have liked. The tenant's furniture may be dated or just simply not to your liking.
  • Plan viewings and inspections around tenants. You need your tenant's permission to organise photographers and valuers to come in and have access to the property for open homes and private viewings. Tenants can make the process complicated, especially if they are not happy about the upcoming sale. Although tenants can't unreasonably refuse access, they can set conditions about access - days and times that suit them - or refuse to leave the property during open homes.
  • A property can be less attractive to owner-occupiers. You may lose some potential buyers who do not want a tenant. Potential buyers looking for a home may find existing tenants inconvenient.

How to sell a property with tenants?

To make sure the sale process goes as smoothly as possible, you need to collaborate with tenants. Therefore, it is essential to work with tenants and keep them informed.

  • Communicate with tenants to make things less stressful for everyone. Give tenants plenty of notice about your plans. Discuss their concerns and any potential problems with property access and scheduling. Then, come up with a plan that suits everyone and try to stick to it. Keep them in the loop with regular updates and any changes. If the tenants feel considered, they will likely appreciate it and may even be willing to help wherever they can.

  • Offer incentives. Tenants are likely to feel overburdened about the whole process. Offering a discount on rent or a voucher to a local family restaurant will likely make tenants feel less stressed and more appreciated. It's a small thank-you for the inconvenience that constant disruption of the sale process may be causing them.

  • Pay for cleanups before viewings. Consider paying for the place to be professionally cleaned before each open home. Your tenants are unlikely to mind but enjoy free cleaning service for the duration of the sales process. Thinking of ways you can lighten the load will help keep tenants happy and ensure potential buyers have a positive experience when viewing your rental.

Selling a tenanted property doesn't have to be a challenging experience. By ensuring that the tenancy laws are followed, and the tenants are well informed, you can make tenants' experience comfortable so that they're reasonable during the sales process.

The information contained in this article is exclusively for promotional purposes. It does not in any way constitute legal advice and should not be relied upon as the basis for any legal action or contractual dealings. The information is not and does not attempt to be, a comprehensive account of the relevant law in New Zealand. If you require legal advice, you should seek independent legal counsel. does not accept any liability that may arise from the use of this information.

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What the community has to say
  • CC

    In my experience, tenants will make the place look unattractive as they won't present it nicely, this puts buyers off.

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