Is it better to sell with or without a tenant?

When selling a residential investment property, one of the most common questions we’re asked is: is it better to sell a property with or without a tenant?

As with most property decisions, the answer isn’t black and white. Whether selling with a tenant in place or selling with vacant possession will deliver the best outcome depends on the likely buyer, the condition of the property, and the local market.

Selling a property with a tenant in place

For many investors, selling a property with a tenant can be appealing. Marketing can commence immediately, and the ongoing rental income up to settlement can be attractive, often equating to three or four months’ rent.

If the property is being sold as an investment, one key question we ask is whether the rent can be increased. If the rent is below market value and can be adjusted, this may directly enhance the property’s value in the eyes of an investor buyer.

However, selling with a tenant does come with limitations. Presentation is usually compromised, inspection times are restricted, and buyers must work around the tenant’s availability. These factors can reduce buyer competition, which in turn may place downward pressure on the sale price.

Challenges of obtaining vacant possession

Securing vacant possession is not always straightforward.

If the tenant is on a fixed-term lease, they cannot be required to vacate before the lease expiry unless both parties agree. If the lease has expired and the tenancy has rolled over to a month-to-month arrangement, Victorian legislation requires a minimum of 60 days’ notice.

In many cases, the selling agent will assist the tenant in finding an alternative rental property. This is not only good practice but can also help expedite the property’s path to market.

Selling a property without a tenant (vacant possession).

In our experience, selling without a tenant often delivers a stronger result, particularly in areas dominated by owner-occupiers.

A vacant property allows for:

Better presentation and styling
Cosmetic improvements and repairs
Flexible and frequent inspections
Broader buyer appeal

When owner-occupiers, families or first-home buyers are the most likely purchasers, vacant possession at settlement is usually essential.

Case study: why vacant possession was the right choice.

We were recently engaged to sell a long-held investment property in an area where most buyers were owner-occupiers. Based on the buyer profile, it was clearly in our client’s best interest to sell the property with vacant possession.

The managing agent issued a Notice to Vacate and successfully secured alternative accommodation for the tenant within the 60-day notice period. Once the tenant vacated and completed their lease obligations, we coordinated a range of presentation works, including:

Minor repairs and maintenance
Carpet replacement and painting
Landscaping improvements
Professional styling

As the property had been rented for an extended period, these improvements made a significant difference to its appeal. We also assisted our client by funding the cost of these works, allowing the property to be brought to market quickly.

Timing was critical, as several comparable properties were about to be listed. By beating them to market, we maximised buyer interest.

The result

Selling the property without a tenant proved to be the right decision. Buyer interest came exclusively from owner-occupiers, and despite a subdued market, three parties competed strongly at auction. The final sale price exceeded both market feedback and our client’s expectations.

So, is it better to sell a property with or without a tenant?

Ultimately, the answer depends on who the most likely buyer is.

Investors or developers may prefer a property sold with a tenant in place.
Owner-occupiers and first-home buyers typically require vacant possession.

Our experience consistently shows that strong presentation and broad buyer appeal drive competition – and competition drives price. For most properties that are not redevelopment sites, selling with vacant possession delivers the best possible outcome.

If you’re weighing up whether it’s better to sell a property with or without a tenant, seeking independent advice early can make a meaningful difference to your final result