Selling a property with tenants might seem complex at first. After all, there’s lots of things to consider like tenancy agreements or income loss due to an unsold property. So, it’s not surprising it feels a bit daunting. The good news is it looks more complicated than it is. But nonetheless you probably have a ton of questions—can you sell a property with tenants still living in it, can you evict them, who can you sell to?
So, to give you a helping hand—here are our four tips to sell a rental property easily.
#1 Understand your tenancy agreement
Now, if you’re selling to a general buyer (not an investor), the property must be vacant before you can exchange contracts—the last thing you want is any complications like losing your buyers at the last minute.
The most common tenancy agreement used by private landlords is an ‘assured shorthold tenancy’ (ATS). This gives the tenant the legal right to live in the property for a set duration of time. Most agreements grant an initial six-month set period. When the six-months end, the tenancy automatically rolls over on a month-to-month basis.
An ATS allows landlords to serve notice to tenants at any time. But, you must give them at least two months’ notice via a ‘Section 21‘ notice. Once this notice has been given, you can then confidently market your house for sale and inform the buyers that the house will be empty when sold.
Once the property is empty, pass on confirmation to your solicitor. Following this, the buyer will most likely arrange a viewing to check whether it is empty—don’t expect them to sign on the dotted line before they’ve confirmed (for themselves) the tenants are gone.
#2. Sell to another landlord
If you have tenants and you don’t want to lose any money, the best strategy is to sell to another landlord (this way you also avoid the issue of eviction). Moreover, this approach means the tenancy agreement transfers over to the new landlord, avoiding any loss of income incurred from waiting for an empty property to sell.
The average landlord gross rental income is approximately £15,000 per year. So, if your property is in a popular location, great, it’s got a far better chance of selling quickly. But, if you’re not so lucky and your property has an undesirable postcode or is in poor condition, you can wait months before a seller comes along. So, suddenly a few months without tenants means you risk losing lots of money. By selling to another landlord you avoid this situation entirely.
#3 Maintain a positive relationship with your tenants
Managing a good relationship with your tenants is vital when you’re a landlord. And, even more, when you’re trying to sell. For starters, you can’t allow prospective buyers to even view the property unless you have your tenants permission beforehand. So, if they say no, where does that leave you and your sale?
So, it’s really important you communicate with your tenants and tell them what’s happening at every stage. Of course, the agents (who are booking the viewings) need to be extra sensitive to their needs. For instance, no viewings at 8 am on a Sunday morning (unless this has been agreed specifically with the tenants beforehand.) The last thing you want is to annoy them and end up dealing with lots of complications like them moving out too early.
And, if you’re trying to market your property to a fellow investor then sitting tenants are also an attractive selling point—it means the new landlord doesn’t have to waste time or money looking for new people.
#4 Sell to your tenant
If the prospect of navigating tenancy agreements is worrying you, or you want to avoid the hassle of evicting your tenants—why not sell the property to them instead? Sure, we often assume people rent because they can’t afford to get on the property ladder. But that’s not always the case. People rent for a variety of reasons like they might want to get to know an area before they commit to buying their own house or they’re in the process of saving for a deposit. And, if your tenants are interested in buying, as their landlord, you can even put in a good word with their mortgage provider to help them a get a better deal.
Need help with selling a rental property?
If you’re struggling to sell your rental property due to issues with your tenants, don’t worry. House Buy Fast has lots of experience in buying properties from landlords quickly and hassle-free. For more information visit housebuyfast.co.uk/services/selling-a-tenanted-property/