New announcement. Learn more

Latest News from My Mortgage


Landlords: Why Selling Your Investment Property to Tenants Could Be Your Best Move

As a landlord, the prospect of selling your investment property comes with several considerations, especially with the upcoming changes to the bright line test on July 1, 2024. This shift, reducing the bright line test from its current duration to just 2 years, presents a unique opportunity for both landlords and tenants.

The Changing Landscape:

With the adjustment of the Bright Line test, many landlords are contemplating their next moves. This change is aimed at reducing the taxable duration of investment properties, potentially making it more appealing for landlords to sell sooner rather than later.

Benefits of Selling to Your Tenant:

  1. Familiarity and Trust: Your tenants, who have lived in and maintained your property, are often the perfect buyers. This can lead to a smoother transaction process.

  2. Cost Savings: Selling directly to your tenant can save you significant amounts in real estate agent fees, often around $30,000, which can be split as a discount between both parties.

  3. Stability for Tenants: For tenants, purchasing the home they currently rent provides stability and prevents the need for relocation.

The Process:

Discussing the potential sale directly with your tenants allows for a private, straightforward selling process. This approach not only fosters goodwill but also ensures that the property remains in hands familiar with its care and history. Here’s how to proceed:

  • Agree on a fair market value, considering the savings on real estate commissions. Getting a valuation ordered for this could be an independent way of doing this. We can order this for you to make sure if that bank requests one, we don't need to get a second one.

  • Help tenants get pre-approved for a mortgage, utilising programs like the First Home Loan or exploring other financing options.

  • Consider the need for a registered valuation as banks often request this for private sales.

Selling your property to your tenant not only benefits you financially but also provides continuity for those residing in the home. It’s a win-win scenario where you avoid hefty fees and your tenants gain a home without the hassle of moving.

If you’re considering this option, contact us at My Mortgage to discuss how we can facilitate this process, from valuation to financing.

Landlords and tenants interested in exploring this opportunity are encouraged to reach out to My Mortgage. Our team is ready to assist with pre-approvals and provide expert advice tailored to your unique situation.


This product has been added to your cart