Selling rental property with tenants

[DadOf3]

I want to sell a rental we have. I understand by law I have to let the tenants know. What is the best way to do this? Anyone had experience? Assume best to meet with them and give them a leter saying that the property is going on the market and request their co-op with showing prospective buyers through?

Also understand it is of benefit to put clause on S&P agreement saying "price includes Chattels at $X" any guidance here appreciated also...

Cheers

[Mojo]

Yes, no matter what else you do...

... you MUST give them the letter informing them of pending sale, and the sooner the better as notice period starts from date they receive that letter. In our case, we informed them by phone of the situation and then drove over same day and handed them a letter confirming details.

Not sure exactly what you're asking re S&P agreement - do you mean that you expect the property to be bought by another investor as a rental property, and that you would state the values of the chattels for them for their tax purposes?? Can't think why else you would need to include that, unless you need it for your own tax purposes? Would be interested in that case to know if this is necessary...

[xris]

as notice period starts from date they receive that letter.

This isn't quite true.

The rules relating to the serving of notices is in the RTA.

If you choose to post that notice to the tenants, it will be deemed to have been served on the fourth day after posting, whether it is received or not. This is another helpful aspect of the RTA in favour of the landlord.

Dadof3,

How do you best tell your tenants the house is for sale?

Tell them the house is for sale.

If you think it is preferable, write something on a scrap of paper as well, saying 'The house is for sale' and give/post it it to them.

Managing rental properties is not rocket science even though some people would have you believe so (especially those who run seminars and get you to pay them as mentors).

xris

[Mojo]

yes that's true xris...

... the notice period only begins right away if you personally hand the letter over to the tenant. Any other method of delivery to tenant (i.e. stick letter in their mailbox or on their porch, or mail to them via NZ Post) delays the commencement of notice period by up to a number of days. Which is why we delivered personally by hand.

Don't forget to date the letter, and make a photocopy for yourself before handing it over.

[Josko]

Can't think why else you would need to include that, unless you need it for your own tax purposes? Would be interested in that case to know if this is necessary...

By specifying the value of the chattels at the book value in the S&P you are able to eliminate the depreciation claw back (argue at least) which has accumulated from claiming depreciation. This is fine if selling to a home owner not so accepted by investors.