Buying a house with tenants: The key differences

Buying a house with existing tenants is very different to a standard property purchase. Let’s take a look at some of the key differences.

The rights of the tenant are protected

When you engage in a standard property purchase, you have the right to do what you want with your new home — within reason. However, when you purchase a property with existing tenants, things are a little different. The tenants’ leases and rental agreements are not terminated by the change of property ownership, and these tenants have their own rights that are protected under Australian law.

You will not be able to evict tenants without a lengthy period of notice. If the tenancy agreement renews on an annual basis, you will need to wait until the agreement is up for renewal before taking such action, and you may have to pay compensation for early termination. With this in mind, it is unwise to purchase a property with tenants if you do not wish to fulfil your role as a landlord.

Legal requirements as a landlord

When you purchase a house with tenants, you are also taking on a range of different legal requirements under Australian law. You will have to make sure of the following, on an ongoing basis:

  • All common areas are well-maintained and kept in a safe condition.
  • The structure of the property remains in-keeping with legal guidelines of safety and security.
  • Electrical, plumbing, ventilation and sanitary systems are fully operational, with reasonable amounts of hot water and heating available to tenants when required.
  • The house is kept free of pests and vermin.
  • Waste is collected and removed from the property at regular intervals.

Please note that these represent just a few of the different legal requirements you may assume as a landlord. These may be subject to change, and there may be other elements that you are responsible for. The underlining point is that you will find yourself responsible for lots of different elements of property maintenance and management if you take over a property with tenants.

Control over rental agreements

While, in your capacity as a landlord, you do have a number of different legal rights and responsibilities, you also have rights of your own. For instance, you do have some control over the rental agreements of tenants at your property.

Before the new rental period is due to begin, you have the right to increase the rent if you desire. You simply need to make sure that you give the appropriate notice before you do so. This helps you to increase the long-term revenue you derive from the property.

Deciding on the right rent fee can be difficult and complex. It is worth taking some time over the final decision and examining similar properties in your local market so that you know what you should be charging.

Learn more about buying a property with tenants before you begin

Do you want to learn more about buying a property with tenants? Do you need further guidance and support before you decide if this avenue is right for you? We are here to help. Reach out to our team today.


We cover Stroud, Bulahdelah, Allworth, Booral, Clarence Town, Dungog, Gloucester, Karuah, Medowie, Nabiac, Raymond Terrace, Seaham, Forster, Tuncurry and everywhere in between.

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