Selling an investment property doesn’t always mean waiting for the tenant to move out first. Many investment properties in NSW are sold with a tenancy still in place and when handled correctly, it can be a smooth process for the landlord, the buyer, and the tenant.
The key is understanding whether the tenant is on a fixed term lease or a periodic agreement, because it changes your strategy, your buyer pool, and (in some cases) your options around vacant possession.
Can you sell while the property is tenanted?
Yes. A tenancy doesn’t stop a sale. In fact, we recently sold a property in Raymond Terrace with a tenant in place, demonstrating that it can be done smoothly for both landlord and buyer.
But it does mean:
- the tenant has legal rights to quiet enjoyment
- inspections must be arranged lawfully and respectfully
- and if a buyer purchases “subject to the tenancy,” the buyer generally becomes the new landlord at settlement under the same tenancy term.
Fixed term lease: what it means when selling
A fixed term lease has a set start and end date. During the fixed term, the tenant generally has the right to remain until the end of the agreement, unless the tenancy ends lawfully for another reason.
How it impacts the sale
A fixed term lease often appeals to investor buyers because it provides certainty of income. It can reduce appeal to owner-occupiers if the fixed term runs well beyond their preferred move-in timeframe.
If the sale is “subject to the tenancy,” the tenancy simply continues and the purchaser steps into the landlord’s position.
Important: Vacant possession + periodic tenancy after unconditional exchange (NSW)
If the tenant is on a periodic agreement, and you have unconditionally exchanged contracts (i.e., the sale is locked in) and the contract requires vacant possession, NSW tenancy law allows you to issue a termination notice on the basis of an actual sale requiring vacant possession.
In that situation, the minimum notice period is 30 days for a periodic tenancy.