Should You Sell Your Investment Property with or Without a Tenant in Victoria?

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You’ve decided to sell your investment property — but now comes the question we hear all the time: Do I keep the tenant in place, or move them out first?

It seems simpler to sell with a tenant — no vacancy, no styling, rent keeps coming in. But in most cases, that convenience is outweighed by a smaller buyer pool, presentation problems, and contract complications.

As David Dawn, Licensed Conveyancer at Victorian Property Settlements, advises:

"Unless you’ve got a gold-plated tenant, you're better off moving them out, dressing it up, and selling it vacant."

1. Tenanted vs. Vacant — What’s the Difference?

In Victoria, you can list a property for sale either:

  • With the tenant still in place (selling subject to lease), or

  • As vacant possession (after giving lawful notice and ensuring the tenant is gone by settlement)

This decision affects everything — your marketing strategy, the buyers you attract, and the final sale price.

2. Selling with a Tenant: The Pros

There are situations where selling with a tenant can work:

✅ You keep collecting rent during the campaign
✅ Investors may be attracted by immediate income
✅ No need to cover the mortgage during vacancy
✅ You avoid delays related to notices or disputes

This can be effective in high-yield suburbs, regional towns, or apartment-heavy investor markets — but only when the tenant plays ball.

3. Selling with a Tenant: The Cons (and There Are Many)

🚫 Limited access for inspections
🚫 Poor presentation or clutter
🚫 Lease limits the settlement date
🚫 Reduces appeal to owner-occupiers
🚫 Tenants may be hostile, uncooperative, or disengaged
🚫 Can create contractual uncertainty if buyers want it vacant

Most emotional buyers — especially owner-occupiers — will steer clear of a tenanted sale. And even investors may use the tenant as leverage to negotiate down.

4. Want Vacant Possession? Know the Rules

If you intend to sell the property vacant, you must follow strict procedures under the Residential Tenancies Act 1997 (Vic).

Here’s what you need to know:

  • You can give a 60-day Notice to Vacate if a contract of sale has been signed and the buyer is entitled to vacant possession at settlement

  • This notice can be given:

    • During a periodic tenancy; or

    • During a fixed-term lease, but only if the lease will expire before the 60-day notice period ends

  • If the lease still has several months to run, you cannot end it early just because you want to sell

  • Timing is critical — serve the notice after the contract is signed, and ensure there’s enough time for vacant possession before settlement

Get the notice wrong, and your entire settlement could be at risk.

5. What Brings the Best Sale Result?

📍 Vacant homes almost always photograph and inspect better
📍 You get more competition from owner-occupiers
📍 You avoid the awkward logistics of inspections and lease compliance
📍 You control the timeline and styling — not the tenant

Yes, there are exceptions — but they’re rare. Most tenants, understandably, won’t go out of their way to help you achieve the best result.

6. Our Advice: Unless You Have a Gold-Plated Tenant — Move Them Out and Dress It Up

If your tenant is cooperative, flexible, keeps the place pristine, and is on a month-to-month lease — you might consider selling with them in place.

But realistically?

🔹 Most tenants are not in that category
🔹 Most properties show better empty and styled
🔹 Most buyers want the flexibility to move in or redevelop
🔹 Most sellers leave money on the table trying to avoid vacancy

Selling is about first impressions — and a property that’s lived in, cluttered, or hard to access sends the wrong message.

Don’t sabotage your sale to save a few weeks of rent. You only get one shot at a first impression in the market.

🤝 Final Word

If you’re thinking about selling a rental property in Victoria, the safest approach is almost always:
Give proper notice, regain possession, present the home well, and sell it in the best possible light.

At Victorian Property Settlements, we’ll guide you through:

  • Tenant notice requirements

  • Contract preparation with vacant possession

  • Risk mitigation during the campaign

  • A smooth transition through settlement

📞 Call us on 03 9783 0111 or visit
🔗 www.victorianpropertysettlements.com.au