Following the increasing popularity of our Investor List, for landlords who are both buying and selling, we thought it might be helpful to share some tips on selling an investment property with a tenant in situ.
The advantages of doing this are threefold:
1. You do not have to cover the loss in rent caused by a void period during the sales process. Council tax payments, standing utility charges, and increased insurance premiums will also continue during void periods.
2. Your property will not be sitting empty, which can attract vandalism and/or asset theft.
3. Your property may well sell to another landlord, meaning your tenant can remain in the property, and the sale can complete quickly because, unlike an owner/occupier, as landlord buyer is less likely to be in a chain situation.
With one in four property sales in the U.K. falling out of bed prior to exchange of contracts, it makes sense to consider selling your property with a paying tenant in situ. Otherwise, the mortgage and other payments could see you considerably out of pocket if the property is empty and takes a long time to sell.
Of course, the biggest problem most landlords fear is that, if they tell the tenant that they are even thinking of selling, even to another landlord, the tenant will hand in their notice!
There is a very simple way to deal with this.
Landlords can incentivise the incumbent tenant to co-operate with viewings and keep the property clean and tidy for them. The incentive doesnt necessarily need to be financial – a gesture of appreciation can sometimes go a long way.
If the property goes to another landlord, then the tenant will benefit from avoiding the cost of moving and the associated tenant fees of moving into a new property.
By law, tenants are not obliged to facilitate this, and are entitled to what is known as “quiet enjoyment” of their rental property. This means that you would be legally obliged to give the tenant 24 hours notice of a viewing, and they are not obliged to be in and allow it. In fact, they have every right to refuse viewings, meaning the landlord could not start the sales process until after the tenant has vacated. A genuine incentive – whether financial or not – solves all these problems, and could cost far less than trying to sell an empty property.
Although Northwood is mainly known for lettings, our Sales Division is growing, as our M.D. Eric Walker explains:
As Eric mentioned, our wide network of landlords consists of many who are in “buying mode” and our offices can contact them directly about any tenanted properties that come on the market for sale. (From a buyers perspective, buying a tenanted property is attractive as the incoming landlord can see a clear track record of how the tenancy has been running, the rent that has been achieved, and they are making income from their investment from Day One. They can also be clear on the exact yield of that property and how it is going to cash flow).
So do not think you cannot sell a property successfully with a tenant in situ. The market place is currently very buoyant with landlords looking to acquire new properties, so now is a great time to consider it. Working with your tenant, respecting their rights, and fostering a good relationship, is key to this strategy.
Here are some testimonials from vendors who have sold their property quickly through our 85+ offices around the U.K.
So, if you wish to sell a tenanted property, then Northwood have just the channel for you – our Investor List.
Any of our offices around the U.K. who have a Sales Division would be pleased to give a free appraisal of the market value of your tenanted property, so please get in touch with your local office.
Northwood is one of the largest and most recognised estate agents in the U.K. and the leading supplier of Guaranteed Rent to give landlords complete peace of mind.
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