We Can Buy Your Tenanted Property - Quickly!
As a landlord, selling with tenants might be the easier and less stressful option - and we can provide you with an offer free of charge.
As a landlord, you might be considering selling your property, but if you have tenants in situ you might be left wondering whether or not you actually can, especially if you don’t want to go through the process of removing the tenants.
You’ll be glad to know that you still have options, but it’s a fairly substantial topic, so let’s dig in!
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The simple answer that you will be relieved to know is, yes, you can sell your property whilst it’s occupied by tenants. It’s actually a fairly common thing that happens a lot as landlords find themselves in the situation that they want to release cash or simply don’t want to deal with the hassle, and on the flip side there’s actually very little the tenant can do about it.
The big thing to be aware of is it’s not like a traditional house sale mainly due to the market as an overall will be smaller, majority of the time you will be looking to sell to a landlord, or a want to be a landlord who is happy with the contract that you have in place. There are also a few more complications that you have to overcome, but we’ll talk more in-depth about them later in the article.
That being said, if everything is handled and done correctly, all parties will be happy with the solution and the tenants won’t notice anything different!
As we touched on, selling a property with tenants isn’t exactly as straightforward as selling a residential property as after all you have a tenant to consider. Unfortunately, you can’t just call your estate agent, and stick the property on the market after a few photos, and expect people to buy the property.
There are a couple of things that you have to do and think about prior to listing the property:
It’s not a straightforward question, there’s a lot to weigh up and consider – your immediate thought, if you’re happy with the tenants, would be not to upset them with eviction if you don’t need to, however, there are pros and cons to both side of the argument and as a landlord, it is something that you have to contemplate.
There’s a completely different process between selling a property as vacant and one that has tenants, so as you can imagine there are quite a few considerations that you have to think about before making such a big and perhaps costly decision.
Why you’re selling
The reason that you’re selling might determine whether you should look to sell with or without tenants. If you are needing to release cash for financial reasons or have an urgency to sell then going through the process of evicting tenants may be time-consuming which you might not be able to do, on the other hand, if you have a lot of time and want to go through the process of evicting your tenant you’re likely to attract more interest in the property and a higher value.
What’s the property market like
What’s the market looking like for the area that you’re looking at selling your property? That’s a big factor, and no we don’t necessarily mean the property purchasing and sales side of things, but how is the rental market doing? If the rental market is buoyant it’s likely to attract more landlords to the area, which means increased competition and an overall better sale price for your property. On the other side, if the rental market isn’t great – you might struggle to sell with tenants.
Appealing to different buyers
It’s more something to be aware of, but of course, if you are selling your property with tenants you’re appealing to a different set of buyers than a vacant property which is the more traditional part of the market. If the property market is booming, the unfortunate fact is that you might be better off evicting the tenants, as usually, prices are higher so the yields, which is an important part of selling to a landlord, are lower, obviously making it a less attractive investment, and visa versa.
As you might have guessed by reading the start of this article, there are actually a lot of positives to selling your house with the tenants in situ, some of which you might not have considered.
We’ve listed some of what we consider to be the best “pros” for you below:
Maintaining rental income right until completion
If you are selling a more typical residential property you would look at putting it on the open market but selling on the open market takes months (usually anywhere between 3-9 months) – so whilst you’re in the property over those months you typically have to cover the expenses, including all the bills, mortgage payments, and anything that needs to be repaired whilst it’s up for sale to ensure it is presentable for viewings. On the flip side, however, if you have tenants, they are hopefully paying rent right up until the point that you sell, meaning all your costs are completely covered.
There’s no renovation required
When you come to sell a property you’ll often have to give it a bit of a revamp, whether that be a small redecorating job or some major fixes, you usually have to do something. When you have tenants then usually you can’t do these jobs as regularly, and for the most part, as long as it’s liveable that will be accepted by a potential landlord buyer – you have a little more leeway.
No need for an eviction
The process of an eviction can be long, you will have to serve your tenants with a section 21. This is a notice of possession meaning you can take control of the property at the end of the tenancy agreement or an agreed break clause. You don’t have to give any particular reason for the eviction, but sometimes it can feel like a pretty tough thing to do, especially if you’re tenants have done nothing wrong, so it’s often not the route that people want to go down – that or they have a long fixed term.
It might be faster
If you have tenants with a fixed term and serve them with a section 21 then you might have to wait a significant period of time before you can actually market the property. Whereas if you have tenants, and especially if you have a decent yield, you might be able to attract a potential buyer much quicker than going through that whole process.
Obviously, there are downsides to selling with tenants too, which you need to consider. Here are some of what we consider to be the main “cons”:
You’ll likely achieve a lower price
Well, this isn’t always the case, but you are more likely to achieve a lower value for your property than if you went on the open market. This could be due to the decreased competition, but it’s more likely that landlords are a bit more in tune with the property market and are wanting to look for a deal rather than paying market value.
Access for viewing
Tenants don’t have to give you access for viewings, they can be awkward if they want and there isn’t anything that you can actually do about it. Some tenants might just be awkward for the sake of it, but others might work long hours for instance, and not allow you into the property without them being there, which is something that you have to work out in an initial honest conversation with the tenant(s) themselves.
Smaller property market
Whatever way you’re looking at it, the market for landlords will be smaller than the general open market for the public. That means it can be harder to find buyers, take you longer and you might get less competition.
That leads us very nicely into this next section, what is integral to the whole process, whatever way you want to go about it – you need to discuss it openly with your tenants! If you are open with them about the sale from the start it will hopefully prevent issues with viewing access and it also opens up an avenue for the tenant to make an offer on the property as we touched on before.
If you have chosen to sell with tenants it’s integral that they are on your side, try and make sure they are happy before approaching the subject – a new potential buyer may want to view the house, and they likely also want to do their own checks on the tenants, the tenants are ultimately a large part of you making that sale.
Turn the conversation to favour you. Be reassuring to your tenants and tell them that this option means that you don’t have to kick them out because they’ve been such great tenants & you’re going to sell the property to another landlord so their occupation is likely safe.
Yes, you can use your local estate agent to sell your tenanted property – however, we would recommend not just jumping into signing with the first estate agent that you get in touch with. As it’s quite a specialist type of sale, putting it straight on the open market might not attract as much attention as you initial thought, you want to choose an estate agent that has an extensive list of relationships with people they know will be interested in your property before even putting it on any popular property portal.
Obviously, it’s quite hard to determine beforehand if they’re telling the truth – but by speaking to them you can hopefully get a feel if they have any interested parties. Also for that reason, if you’re selling a tenanted property it might be better to stray away from online estate agents as you’ll likely miss this step which might be the difference from selling your home.
The tricky part when you have tenants is, of course, arranging the viewings for potential buyers – whilst also balancing your tenant's rights and respecting them, you need to be really careful when arranging this as to not strain the relationship.
It’s important that you stick to a few rules when arranging viewings with tenants:
At this point, you’ve hopefully made your decision, and if that’s to sell your property with the tenants in situ, you have a few options to consider on what path you go down. We’ve taken a look at a few of those options, explained each, and highlighted some pro’s & con’s to help your decision:
Before we start off in this – full disclosure, we are a cash house buying company that can buy your tenanted property in 7 days. Although we might be slightly biased, we always want to be as transparent as possible as we recognise that our service won’t work for everyone, but now that’s out the way, what exactly is a quick house buying company?
A cash house buying company is exactly as it sounds, they buy homes for cash and in doing so can operate very quickly – for instance, we can purchase your home in as little as 7 days. The main service is the speed of the sale and the fact it’s a minimal hassle, but in return, you won’t achieve full market value, but you don’t have to go on the open market.
There isn’t too much to touch on with this as we talked about it earlier, apart from you should choose a traditional estate agent over online for the edge on leveraging their relationships! Just like with any sale method, even the most common, estate agents and the open market method has its pros & cons, which we’ll touch on below.
Selling your buy to let at auction is also an alternative option. Not all auction houses will allow you to sell with tenants, but some will, and if you choose one of them it might be a great option. It will usually take around 6-10 weeks to prepare your property for auction and you will have to pay a fee to the auctioneer which is usually a percentage of the sale price. As with any method, there are pros and cons to this one as well:
During any part of this process, something you might encounter is unhappy tenants, either for the fact, you’re wanting to sell or maybe they're just generally unhappy, it happens!
If you’ve read through this article, you’ll realise that your tenant's co-operation in order for you to sell the property with them in situ is pretty much essential. You won’t be able to host viewings of the property and you also can’t just walk in.
There are two things you can do in this situation, you can try and remedy the situation or you can start formal eviction proceedings.
It’s always easier to try and remedy the issue if you can, try not to be too intrusive. Explain your side of the story and try and understand why they are unhappy – something like a temporary agreed reduction in rent might be a good solution until you can get the property sold.
If you have no luck, it’s time to serve a Section 21 notice – this tells the tenants that you want them to leave. There’s no need to explain why you want them to leave, but you need to give them adequate notice, usually, at least 2 months and you need to specify the date that you wish to take possession of the property. Make sure you record everything, sending everything by recorded delivery and keeping a log of any communication, which you should then fill in an N215 form confirming you have followed all the correct procedures.
The other thing that you have to think about that’s a bit different from a standard house sale when you’re selling with tenants, is the tenancy deposit and agreement.
Let’s tackle the agreement first, this will be transferred to the buyer and you wash your hands of that point. The new landlord essentially steps into your shoes, the tenancy agreement will remain in place even though the name of the landlord will be out of date.
The deposit is a little bit more tricky, but this should ultimately be handled by your conveyancing solicitor. They should arrange for the deposit to be transferred to the new landlord, which is why we would recommend choosing a solicitor that is experienced in dealing with selling properties that are tenanted, it’ll make the whole job a lot easier.
We’ve spoken about quick house sale companies and how they can help you, but there are a lot out there, so why us? We’re genuine and from the start, we’ll be completely transparent and honest about what we can offer you. We’re also not middlemen like a lot of the competition, we have our own cash reserves ready to buy your property. Importantly, we’re a name you know you can trust, being a part of The Property Ombudsman and The National Association of Property Buyers.
What also sets us apart is our customer service. As you might be able to tell by the length of this article, selling a tenanted property has a few more steps when compared to a standard sale, which can already be stressful and time-consuming. Not to worry though, when you sell to us we handle absolutely everything for you from start to finish. You don’t just have to take our word for it though, our service is well regarded by hundreds of previous customers which you can see on all the popular review platforms such as Trustpilot.
Interested in hearing more about our service? Feel free to get in touch with us.0800 024 8444
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|Your options||Average sale length||Typical cost to you|
|The Property Buying Company||2-3 weeks||£0.00|
|Other House Buying Companies||2-10 weeks||£1000|
|Property Auction||6-10 weeks||£2500-£5000|
|Online Estate Agents||16-52 weeks||£1000(upfront)-£5000|
|Estate Agents||16-52 weeks||£5000|
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The Property Buying Company is registered with the Property Ombudsman and is a member of the National Association of Property Buyers
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