Whatever your reasons for deciding to sell your investment property, there will be key decisions to make regarding your tenants. Maybe you’ve decided it’s time to reduce your buy-to-let portfolio or you’re selling to reinvest in a new property. In this blog, we’ll provide some top tips to help you sell a tenanted property as seamlessly as possible.
A sale can often be a stressful time for a tenant as you are introducing uncertainty. It’s important to open lines of communication with your tenants early, informing them that you intend to sell before you put the property on the market.
Often it can be a good idea to offer your existing tenants first refusal on buying your rental property. If they’re not interested in buying, then you’ll need to decide whether you want to sell the property as a tenanted buy-to-let or a vacant home. Either way, it’s a good idea to keep the tenant up to date with progress of the sale.
Should you sell your buy-to-let as tenanted or vacant?
If you sell a tenanted property, your target market will be limited to other landlords, who might be attracted by the prospect of having rent coming in from day one.
If you sell a vacant property without tenants, you’ll be putting your home on the open market. Selling to a buyer who intends to live in the property means serving notice on your tenants. Of course, you will need to follow the correct procedures to evict your current tenants first.
What are the benefits of selling to another landlord?
Selling a property with tenants in situ is a great option for landlords, offering a cost-effective and relatively smooth route to selling.
Buying a property with ready-made tenants provides the new buyer with a good tenant immediately, and they can start receiving rental income from the day they acquire the property. Another positive for the seller is the ability to maintain their cash flow from rental payments until the date of the sale. Also, both seller and buyer can avoid void periods with a tenant in situ sale. As for the tenant, they can remain in the property they have been happily living in without any disruption at all.
What about selling to other buyers?
A tenant with an ongoing fixed term lease cannot be forced to vacate a property by law. They have the right to remain in the property until that fixed term expires. However, it may be the case that your tenant is already thinking about moving, so it’s worth finding out if they might be interested in ending the agreement early.
For Assured Shorthold Tenancies (AST), you can ask your tenants to move out at any point, but you must give them 60 days’ notice. If your tenants have signed a longer fixed term contract (e.g. for 12 months) you may have to wait to sell.
Once notice is served, you can put your property on the market. Remember, if your property has not sold before your tenants move out, then you will lose rental income.
Can I sell with ‘sitting’ tenants in place?
Sitting tenants (regulated tenants) are in a different category to those on an Assured Shorthold Tenancy. Sitting tenants are protected under the Rent Act 1977, under which a landlord cannot evict a tenant with a Section 21 Notice.
You can sell your rental property with sitting tenants. However, it’s important to remember that your tenants have certain rights. Evicting a sitting tenant may be a very expensive and time consuming process.
How do I arrange viewings on a tenanted home?
One of the key ways you can make the process of selling a tenanted property smoother is by being considerate to your tenants and respecting their space. Be reasonable about the number of viewings you intend to hold. If you give them sufficient notice, most tenants will be amenable to viewings.
As a landlord, maybe you can offer your tenant an incentive, such as reduced rent during peak viewing times as compensation for the inconvenience.
The state of the property when potential buyers look round could also have a big impact on your sale, and your tenants may feel more inclined to tidy up if you have a good relationship with them. Ensuring a clear line of communication between you and the tenant is vital to maximise your chances of a good sale.
Sell your tenanted property with The Landlord Link
At The Landlord Link we have a wide variety of tenanted and vacant rental properties listed for sale with a large portion of our buyers being landlords and investors.
On The Landlord Link, landlords with rental properties can list them for sale, absolutely free. Whether you’re looking to sell your buy to let property or buy a new rental property, join The Landlord Link and buy and sell landlord to landlord.