Selling Property with Tenant

rozeepozee

I am thinking about selling one of my rental properties next year. I have never done this before. The property is tenanted with a fantastic tenant who's been there 3 years. I've offered him first refusal, but I don't think he's in the market to buy right now. Rather than turf him out and sell with vacant possession, I wondered about selling with him in situ. He's always paid his rent on time and I've had no problems whatsoever. The property is let at probably a little under the market rate as I've not put the rent up since he moved in. Does anyone have any advice or experience of this? Thanks in advance

Shahie

Under normal circumstances this would be a definite No No... Property must be Full Vacant Possession on day of completion as stipulated in most Mortgage offer's!

Let the potential buyer know if they are 'buying to let' that this is a good tenant then let the Tenant and the potential buyer have a discussion and leave it at that. Just be aware there may be potential legal problems if the Tenant later breeches his Tenancy agreement.

Sounds like you have a great Tenant but what takes priority, Sale of the Property or looking after the Tenant...

lush_walrus

Its possible to do, but of course you are straight away narrowing down your potential buyers to just those who are looking to BTL, which again are narrowed down at the moment as prices are high and returns are lower than they have been.

Worth a try on the market, but I think you will be making the process unnecessarily more difficult than it need be for no particular gain to yourself.

If I were you I would try to sell it with the tennant in, but on the condition that he will leave when the sale goes through. Reduce your tennants rent for the time that it is on the market so that he wont regrudge people coming to view the property and ask the EAs to take potential buyers around after calling him and making sure it is ok with him first. That is what most BTL people do. That way you will still be getting rent for the period it takes to sell, which I would imagine is what your interest is, but opening up the market to any buyer, if the buyer then turns out to be someone interested in BTL then the tennant can always stay but under their terms and their contract. If you dont do it that way, you will in effect create a sitting tennant situation, and why do that.

rozeepozee

Shahie wrote:

Sounds like you have a great Tenant but what takes priority, Sale of the Property or looking after the Tenant...

I take your point. I'm vacillating because I don't have to sell, it's just one option. With such a trouble free tenant, I had previously thought I wouldn't bother selling until the tenant gave notice to quit. I get a pretty reasonable return on the property so I could just continue letting. Although I'm very debt averse and by selling I could reduce my overall mortgage debt using the equity from this flat.

I've seen tenanted properties sold at auctions and with the BTL market seemingly still going strong and the changes to the SIPPS rules to allow for residential properties to be included in a pension pot wondered if there was scope on the open market for selling without vacant possession.

Mr_Proctalgia

Could you perhaps wait till you have a void in one of your other properties, offer that one to him (with maybe a month rent free to cover their removal costs) That way you would keep a good tennant and get an empty house.

shykins

pity u arent in essex thats exactly what we are trying to buy..

having spent the last 5months attempting to buy the exact same thing the vendors solicitors are rubbish and refuse to answer our questions so we are back looking again

good luck x

Somerset

Whereabouts is the house rozeepozee ? I've also seen the tenanted property sold at auction, and assumed this was the way most were sold. I've also come across one being sold through an estate agent ie normal way, but in that instance the tenant was not answering the door to viewers. I would have thought auction was the best way and obviously you can set a reserve.

rozeepozee

Mr_Proctalgia wrote:

Could you perhaps wait till you have a void in one of your other properties, offer that one to him (with maybe a month rent free to cover their removal costs) That way you would keep a good tennant and get an empty house.

That's not a bad thought. Although, I haven't had an empty property for a few years - don't suppose I should complain about that, eh?

In answer to Somerset's query, the property's in central Sheffield.

In response to shykins, sure you wouldn't prefer a nice place in Sheff

ioscorpio

Have a look on these sites, you might be able to find the best way to sell with your tenanted property.

https://www.streetwisepublications.co.uk/forum

https://www.singingpig.co.uk

martha_3

i'm an investor and having a good tenant in place when i buy a property is a plus in my books. it means that I'm getting income from the first day of ownership. it may be an idea to put it for sale with an estate agent who also manages rental properties as he will have investors looking for just that.hope this helps.

grumpyoldgit_2

I too have bought and sold property with sitting tenants - not a problem. In fact I would regard it as a bonus in both cases. I was able to satisfy myself rental income was real as opposed to estimated and demonstrate same when I sold the property on (with same tenant I inherited).
Keep your tenants informed about what you intend to do and you should'nt have a problem
I would not hesitate to buy a property for rental that has an established tenant with a good record - that would be one less problem to solve.
Good Luck

GoG