A common question asked by landlords thinking of selling is "Can I sell my property with a tenant in situ?", the simple answer is yes, however there are quite a few issues to consider and resolve before putting the property on the market. Another typical question is "is it better to sell a house with or without tenants?" the answer to this question is more complex, often subjective and very much dependant on individual circumstances and requirements, if you find yourself pondering this question we are always happy to talk you through the pros and cons.
Things to consider when thinking of selling a tenanted property:
- Communication with your tenant - communication and discussions with your tenant are paramount, naturally a tenant will undoubtedly feel unsettled by your decision to sell, however with re-assurance that you are looking to sell only to an investor to take on the tenancy a tenant is normally comforted by that news.
- Condition of the property - Selling with a tenant in situ will only work if the tenant keeps the property in good order, a dirty property or unkept garden is unlikely to appeal to an investor, and certainly not attract the best price. Sometimes minor issues can be resolved with honest and upfront conversations with the tenant.
- Rental Yield - One of the biggest factors in a buyers decision-making process will be how much the rent is and what is the rental yield? Often when a tenant has been in situ for a long period of time the rent may be lower than the current market rate, sometimes in order to make a sale with a tenant in situ, it may be necessary to review and update the rent to be inline or close to current market value, this again may require and upfront and frank discussion with your tenant.
- Compliance - Is your tenancy compliant with current legislation? Any potential buyer will want to ensure that everything is up to date and compliant. Common issues tend to revolve around expired gas safety certificates, expired (or non-existent) Electrical Installation Condition Report, deposits (paperwork not in order, deposits taken over the legal limit or not protected in accordance with the regulations) - we can do an audit before you put your property on the market to ensureyou are compliant or to advise on any remedial action needed to mitigate any issues.
Here at Forum Sales & Lettings we are experienced in selling properties with a tenant already living in the property, however, it does rely on a good relationship being built between all parties, the agent, the tenant and the landlord to make the transaction work and run as smoothly as possible.
If you are thinking of selling a tenanted property and wish to discuss how we can help please do contact us.
If you are looking at purchasing a buy to let property or investment property, please call us to be added to our exclusive investor mailing list, so we can keep you upto date with the best investment properties available.
- Sitting Tenant - often the term 'Sitting Tenant' is wrongly used in the context of selling a property with a tenancy / tenant in place. In the example above we are discussing selling a property with an tenant in place on an Assured Shorthold Tenancy (AST), these are not sitting tenants, as their tenancies are only for a finite period of time, or as often with AST are left to run on a periodic or rolling basis. A new owner could end the tenancy (subject to the terms of the tenancy) with minimal notice. A sitting tenant is one who has security of tenure, generally speaking these would (in all but exceptional cases) be tenancies that commenced before 1989 under the Rent Act 1977, selling a property with a rent act tenant in situ would be a completely different scenario.