How to Buy a Property With a Tenant Already In It

Buying a tenanted property is common in Brisbane's inner east, particularly for investors. But the rules around tenant rights, open home access, and what you can do after settlement are strict in Queensland. Knowing them upfront saves a lot of friction.

The law that governs it

Queensland tenancies are governed by the Residential Tenancies and Rooming Accommodation Act 2008 (Qld). This legislation protects tenants regardless of whether the property changes hands. A sale does not override or cancel a tenancy agreement.

Fixed-term vs periodic tenancy

The type of lease in place determines your options as the new owner.

Notice periods for ending a periodic tenancy

Under the RTRA Act 2008 (as amended by the Residential Tenancies and Rooming Accommodation and Other Legislation Amendment Act 2024), the following minimum notice periods apply:

Accessing the property during the sale campaign

During the marketing campaign, the vendor's agent must give the tenant at least 24 hours written notice before each open home or inspection. The tenant cannot unreasonably refuse entry, but they do have the right to be present.

Open homes can only be held at reasonable times. The number and frequency of inspections should not unreasonably interfere with the tenant's right to quiet enjoyment. If the tenant is being uncooperative, this is a legal matter best handled by the property manager, not the agent or buyer.

What happens at settlement?

At settlement, the following transfer automatically from the vendor to you:

Your solicitor will arrange for rent to be adjusted at settlement. Any rent already paid by the tenant beyond the settlement date is credited to you.

Bond lodgement and RTA notification

After settlement, you must notify the Residential Tenancies Authority (RTA) that you are the new owner and have the bond transferred to your name as lessor. Do not leave this undone. The bond belongs to the tenant and must be lodged with the RTA. Retaining it without authority is a serious breach.

The RTA can be contacted at rta.qld.gov.au or 1300 366 311.

Key due diligence questions to ask before you buy

Break lease: what happens if the tenant wants to leave during the campaign

A fixed-term tenant is entitled to remain until the lease end date, but some tenants will approach the property manager about ending the lease early once a sale campaign begins. Under the Residential Tenancies and Rooming Accommodation Act 2008 (Qld), a tenant who breaks a fixed-term lease is liable for the landlord's reasonable reletting costs. These typically include advertising costs and a portion of the re-letting fee, capped at prescribed limits that vary depending on how much of the fixed term remains.

For a buyer, a tenant seeking to break the lease during the campaign changes the sale dynamic. The property can shift from a tenanted investment to vacant possession by settlement during the marketing period, which attracts a different buyer pool and may improve the sale outcome. Before making an offer on a tenanted property, ask the vendor's agent whether the tenant has indicated any intention to vacate. This materially affects your assessment of the property and the timeline to occupation.

From the seller's perspective: if vacant possession is the goal to maximise price, the cleanest path is to negotiate a mutual agreement with the tenant before listing. This typically involves the vendor waiving break lease costs in exchange for the tenant vacating by an agreed date. The property manager coordinates this, but the vendor authorises it. Proceeding this way removes the uncertainty that discourages buyers who want certainty on timing.

Does a tenanted property sell for less?

In most cases, yes, though the discount varies significantly by circumstance. In Brisbane's inner east in current market conditions, a tenanted property typically sells at a 2 to 5 percent discount compared to what the same property would achieve with vacant possession. The discount widens when rent is below market (investors must price in the gap until the next rental review), when a long fixed-term remains, or when the tenant has limited inspection access during the campaign and the property has presented poorly at open homes.

The discount narrows or disappears when the tenant is cooperative and maintains the property well, the rent is at or above current market, and the target buyer is an investor seeking immediate rental income. A well-managed tenanted property with a quality tenant paying market rent removes occupancy risk from the buyer's perspective and can be a genuine asset in a campaign targeting investors.

Owner-occupier buyers almost always price a tenancy as a cost, because they are paying to live somewhere else while they wait for the lease to end or the notice period to expire. In suburbs where the buyer pool skews toward owner-occupiers (Bulimba, Hawthorne, Camp Hill), the tenanted discount tends to be larger. In suburbs with stronger investor demand, the discount is smaller. Knowing your suburb's buyer mix and the likely buyer type for your property is the starting point for deciding whether to sell tenanted or manage a vacancy period before marketing.

Sources: Residential Tenancies and Rooming Accommodation Act 2008 (Qld); Residential Tenancies and Rooming Accommodation and Other Legislation Amendment Act 2024 (Qld); rta.qld.gov.au. This article is general information only and does not constitute legal advice.