top of page

What to look out for when buying a tenanted investment property

HTML5 Shim and Respond.js add IE8 support of HTML5 elements and media queries [if lt IE 9]> <![endif]



End Facebook Pixel Code [if lt IE 9]> <link rel="stylesheet" type="text/css" href="/sites/all/themes/saturday/css/ie.css" /> <![endif]

StartFragment crazyegg


If you’re looking at getting into property investment, you’d probably love to secure one that has a tenant in place already.

After all, that means no vacancy rates and you can just hit the ground running.

But, is buying a tenanted property really all that it seems?

You might be surprised to learn that several adverse effects can come from purchasing property with an existing tenant.

There are three red flags to look out for to make sure what you see, really is what you get:

1. Special lease conditions

Imagine being half-way through settlement, and suddenly the tenant leaves.

The immediate income you’ve been banking on has vanished, so you need to reassess and do a complete 180 on your strategy.

Tenants are within their rights to break a lease in the event of the property being put up for sale – if their tenancy agreement includes special conditions that allow for this.

That’s why you need to read their tenancy agreement carefully to ensure they will, in fact, be staying on for the term that you’re expecting.

2. Are existing tenants pay current market rent?

You would be surprised how many rental properties are actually under rented right now in the market.

And if they’re under-rented, it can be tough to get that existing tenant to pay the actual market rent once you take over.

Sometimes, you might have to resort to getting them out of the property. And that can be more headache than it’s worth.

3. If there is a current lease in place

You would be surprised to learn how many people lease their properties to family, friends, or others without having a formal agreement in place.

So, you definitely can’t take it for granted that just because a property has a tenant, there is a formal lease. And when there isn’t one, you could face the tenants leaving unexpectedly before the property settles.

With the place a mess, and no bond, there’s no contingency for you to make claims against.

So, if you’re looking to invest in a property, don’t let the presence of a tenant sway you towards thinking it’s a better investment long-term.

Things can and will change, so make sure you tick off those boxes and protect your investment.


This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

Featured Posts
Recent Posts
Search By Tags
Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square
bottom of page