KEY TAKEAWAYS: You may be buying a tenant (good or bad), not just a property The contract and lease both matter Good legal advice before exchange can save you from costly mistakes What Should You Check Before Buying an Investment Property? Before buying an investment property in NSW, you should review the contract, lease terms, tenant details, strata reports, planning certificate, and ongoing tax and landlord obligations. Buying an investment property is exciting, but it’s also very different from buying a home to live in. You’re not just buying bricks and mortar. You’re buying: a legal contract (sometimes) a tenant and ongoing obligations as a landlord Here’s a simple guide to the key legal things you need to know before you sign anything. 1. The Contract Matters More Than You Think In NSW, once you exchange contracts, you are legally committed. Before you sign, your solicitor or conveyancer should review: What’s included in the sale (fixtures, appliances, etc.) Any special conditions Settlement timeframes If the property is tenanted, the contract will also confirm whether it’s being sold with the tenant in place. 2. You Might Be Buying A Tenant Too If the property is already rented, you take over the lease under the Residential Tenancies Act 2010 (NSW) This means: You must honour the existing lease You can’t just ask the tenant to leave You take over the bond held by the NSW Rental Bond Board Always check the lease terms, rent amount, and payment history before committing. 3. Understand the Real Costs Investment properties come with different financial considerations. These may include: Stamp duty (no exemptions like owner-occupiers) Ongoing land tax under the Land Tax Management Act 1956 (NSW) Capital Gains Tax when you sell It’s important to get both legal and accounting advice before you buy. 4. Check What You Can (and Can’t) Do With the Property Not all properties can be used the way you might expect. Zoning laws under the Environmental Planning and Assessment Act 1979 (NSW) control things like: Whether you can renovate or extend If you can add a granny flat Whether short-term letting (like Airbnb) is allowed Never assume, always check. 5. Buying a Unit? Look Closely at Strata If you’re buying an apartment or townhouse, there are extra layers to consider. Review: The strata report (financial health of the building) Any defects or upcoming repairs By-laws (rules that can affect tenants, pets, or short-term letting) Relevant law: Strata Schemes Management Act 2015 (NSW) Some buildings restrict how you can lease the property. 6. The Cooling Off Periods Aren’t Guaranteed In NSW, you usually get a 5-business-day cooling-off period, but not always. This can be waived if you purchase at auction, purchase rural land or have a signed Section 66W Certificate NSW Many investors buy at auction or waive cooling-off, which means you’re fully committed immediately. 7. Do Your Due Diligence This is one of the most important steps. Before exchange, you should review: Title search Planning certificate (10.7) Sewer diagram Building and pest reports Strata report (if applicable) In NSW, it’s largely “buyer beware” you need to investigate before you buy. 7. Being a Landlord Comes With Legal Responsibilities Once settlement is complete, you step into the role of landlord. Under the Residential Tenancies Act 2010 (NSW), you must: Keep the property safe and habitable Carry out repairs Follow strict rules for rent increases and notices It’s not completely “passive income” there are ongoing legal obligations. Buying an investment property is a great way to build wealth—but it comes with more legal complexity than most people expect. 📞 Get in touch with Coutts today to start your buying/selling process with clarity. Schedule an Appointment Now Common FAQs 📌 Can you buy a property with a tenant already living there in NSW?Yes. If the property is tenanted, you usually take over the existing lease and must comply with the terms under the Residential Tenancies Act 2010 (NSW). 📌 Do investment properties have a cooling-off period in NSW?Usually yes, but cooling-off can be waived if you buy at auction, purchase rural land, or sign a Section 66W Certificate. 📌 Do I pay land tax on an investment property in NSW?Potentially yes. Land tax usually applies to investment properties depending on the total taxable land value and ownership structure. 📌 What legal checks should I do before buying an investment property?You should review the contract, title search, planning certificate, building and pest reports, strata report (if applicable), and lease documents. ABOUT KAY VITOGIANNIS: Kay joined the Coutts team in May 2021 working as a Licensed Conveyancer within our Property & Conveyancing team, based in our Narellan office. Kay has over 20 years of experience in the Legal industry. She began her journey in CBD Conveyancing firms as a secretary and attained her Advanced Diploma in Conveyancing in December 2010. For further information please don’t hesitate to contact: Kay Vitogiannis Licensed Conveyancer info@couttslegal.com.au 1300 268 887 Contact Coutts today. This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. 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