The short answer: Set the settlement date by working back from when a tenant can realistically move in. On one recent purchase, the seller’s 90 day settlement fell in early December, when tenant enquiry usually thins, so it moved to mid January. You gain fewer vacant weeks. You give up some offer strength and face a longer wait to settle.
Settlement starts your costs before rent starts your income
I’m a buyers agent, and I treat the settlement date as a term to negotiate before the contract is signed.
Buyers push hard on the price of an investment property. Then they accept whatever settlement date the seller puts in the contract.
Settlement is the day you take ownership, and the day your loan starts costing you interest. Rent starts later, when a tenant moves in. In between, you are paying interest and rates on a house that earns nothing. Once the contract is signed, the date only moves if the seller agrees.
December settlements can mean weeks without a tenant
Settlement looks like paperwork. The seller proposes a standard period, the solicitors agree, and everyone’s attention goes to finance and inspections.
Most of the year, no harm done. A property that settles in March or August gets advertised and leased in the normal run of things.
Late November and December are different. In the markets I buy in, tenant enquiry thins out as Christmas gets closer, and people relocating for work tend to move in the new year. Property managers and conveyancers wind down too. Settle into that window and the property can sit empty for weeks, with you carrying the full cost.
A January date and early access on a recent purchase
A client of mine recently agreed to buy a house in regional Victoria. It was off market, which means it was never publicly advertised. The seller asked for a 90 day settlement, and that landed in early December.
On paper, fine. In practice my client would have taken ownership just as the leasing market went quiet.
So I raised it with the selling agent before anything was signed. Settlement is now set for mid January, as a fixed calendar date. My client also has early access before settlement, to get any works done and to advertise for a tenant.
Both came out of a direct conversation with an agent I have worked with on many purchases. I act only for the buyer and receive nothing from the selling side. The price did not change.
The early access does a lot of work in Victoria. A rental there has to meet the state’s minimum standards before it can be advertised. So the checks come first and the listing second, and early access lets both happen before settlement.
Same house, same price. What changed is how the first months of ownership will look.
What a later settlement costs you
The main risk is the longer wait between contract and settlement. Finance approvals carry expiry dates, so speak with your mortgage broker before you propose a date.
The seller can also say no. Some want their funds before Christmas.
And this example had conditions you may not have. It was off market, so no other buyer was offering the seller a faster or simpler settlement. At a public listing with several offers in play, a longer settlement can weaken yours. You may have to decide whether the date or the property matters more.
Early access brings its own questions about insurance and liability on a property you do not yet own. Your solicitor or conveyancer should draft that clause. Any tenant approved before settlement is relying on the date holding.
Keep the scale in view as well. A few vacant weeks will not make or break a long term investment. It is a cost that can sometimes be removed with one line in the contract.
The order to work through before you sign
Is the property already tenanted? Check when the lease ends. One that expires over summer only delays the question.
Can settlement move to a date after the shutdown, when enquiry has usually picked up?
If the date cannot move, can you get early access to prepare and advertise the property before you own it?
If neither is available, a lower rent to fill it quickly is the option I reach for last. Talk to your property manager about lease length first. A lease signed in December reaches its end date the following December. If the tenant moves on then, you are back in the same slow market.
This is for investors buying a vacant property, or one with a lease ending soon, where the contract is being signed in spring. It matters less if you are moving in yourself or buying with a long lease in place. And if the seller’s date is the condition of winning the right property, then the vacancy is a known cost to plan for.
The rule to keep: before you sign, ask what date a tenant can realistically move in. Set the settlement date from there.
If you have an offer coming up, what date is in the contract, and what will the rental market look like that week?
Frequently asked questions
What happens if an investment property settles in December?
It can sit vacant for longer than usual. In the markets I buy in, tenant enquiry thins out before Christmas and property managers wind down, so you may pay interest and rates for weeks before rent starts.
Can you negotiate a later settlement date?
Yes, if the seller agrees. It is a request, and some sellers want their funds before Christmas. At a public listing with several offers in play, a longer settlement can weaken yours.
What is early access before settlement?
It is a contract term that lets a buyer into the property before settlement, for example to prepare it and advertise for a tenant. It raises insurance and liability questions, so your solicitor or conveyancer should draft it.
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Disclaimer: The information in this article is general in nature and does not take into account your personal objectives, financial situation, or needs. It is not financial, legal, or tax advice. The Nelis Group accepts no liability for actions taken based on this content. You should seek independent advice from a relevant licensed professional before making any decisions and always confirm the latest rules and thresholds with your state revenue office or relevant authority.
