Is selling to tenants a good idea?

I have had some landlords approach me and ask: “Should I sell to my current tenants? They love the property and have taken good care of it”.

This seems logical but the big question is: will the tenants pay a premium price for your property?

Let’s go into some of the pros, cons and potential costs involved in this process.

Will tenants pay the highest price for your property?

Being a landlord myself, I would like to think so. rent lease property house agreement tenant agent landlord contract

As a real estate agent we often see that buyers who have created an emotional attachment to a prospective property are likely to pay more than buyers attempting to pay a ‘logical’ price for the property.

Based on this, shouldn’t your tenant be willing to pay the most for your property?

While this can sometimes be true, it is not always the case.

For example some tenants can feel a sense of ownership and take on fixing/improving things around the home themselves sometimes with or without permission.

If they have lived in the property for many years and made personal changes then they may start to think that you should reduce your price for what they have done to the property.

Some of these “improvements” may have actually devalued your property but they may still expect a discount. 

You will also need to think about wear and tear on the property when it is selling. 

When the tenant moves they may need to restore the property back to the condition that it was in when they originally signed the lease.

This may help you get more for the property because it may be due for new carpet or a fresh coat of paint than if you sold it to the tenant in its current condition.

Then there is the flipside of the argument as well.

Because your tenant has lived in the property and knows the ins and out of it, they may be more willing to accept it in its current state and see past the imperfections of wear and tear that have occurred over the years

Sell direct or take it to market?

Here is a table that can help you with the decision process, but keep in mind that if you do decide to sell directly to your tenants without testing the marketplace you could be in danger of missing out on the highest possible price for your home.


Summary notes australian dollar money keys tenant deposit buy cost house property

As you can see there is not a one size fits all solution for everybody’s situation, but I hope this table helps get ideas out of your head to think of the easiest and most profitable option.

At the end of the day if you hire the best real estate agent to sell your property on the market you should be able to get the best possible price for your property with a lot less heartache.

The reason why I say this is that you are dealing with an emotional buyer that is in theory in love with your property.

However, sometimes emotion isn’t enough without being fuelled by competition.

Want more of this type of information?

Jhai Mitchell


Jhai is the Internet Marketing Business Development Manager for Elders Toongabbie and Kings Langley. He has been consistently quoted in the Sydney Morning Herald and Real Estate Business online. Visit his blog at

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