Can I sell my property while the tenant is living there?
When looking to sell a tenanted property it can be difficult to decide the best course of action: regain possession before selling or sell with sitting tenants.
The former might be thought of as the ‘traditional’ way, but this process can take months. It involves serving notice to terminate the tenancy, waiting to gain access, checking for any necessary repairs or redecoration, preparing and marketing the property then waiting for a sale.
The alternative option, selling with a tenant ‘in situ’, typically means buying a property in which a tenant already resides and, depending on their current tenancy agreement, will be entitled to continue to live once purchased by a new owner. This saves time and disruption and allows the seller to continue receiving rental income up until completion.
Important questions to ask:
• Are there any outstanding repair requests or complaints about the property from the tenant?
• When is rent due and has it always been paid on time?
• Under which approved protection scheme is the tenant’s deposit against damages held? It’s also worth getting a copy of the inventory that was taken when the tenant first moved in.
• For HMOs, are the necessary licences in place and when are they due for renewal?
• When does the current Gas Safety Record expire and are there smoke alarms and carbon monoxide alarms in the property as required by law?
• What are the important details of the current tenancy agreement?
Helping a first time landlord purchase with a tenant in situ
As a division of Finders Keepers, Inspired Sales & Acquisition’s expertise lies in matching up landlords who want to sell with our database of investors looking to buy with reduced risk. One example was a stylish 2 bedroom apartment conversion in the centre of Abingdon. Finders Keepers had let and managed the property for 18 months when the owner, who lived abroad, decided to sell as they were keen to free up equity to purchase a property locally.
Inspired recommended listing the property with tenants in situ rather than serving notice in order to gain vacant possession. We began marketing the property, including listing it on Rightmove, and soon received an enquiry from a buyer who had inherited some money and was keen to invest in property. As a first time landlord, this modern apartment appealed to them as it is in very good condition and, being tenanted through Finders Keepers, they trusted that the property would be fully compliant and have a great, reliable tenant.
The offer was accepted and each party was thrilled: the tenants could continue living in their home, the vendor could go on to buy a property abroad, and the buyer acquired a fantastic property with a 5% return and great tenants.
Maxine Allington, Head of Inspired Sales & Acquisitions, says, “If you’re buying or selling an investment property then choosing one with tenants in place is the most logical way. The property is tried and tested and fully compliant, it already has a tenant, the rent is set up…in short, the risks are lowered for both vendor and buyer.”
If you are considering selling your tenanted property – even if it is let through another agency – we can help you decide if selling with a tenant in situ is the right solution for you. 01865 302314.
Posted August 2020