Sell property with tenants?

cypher007

Want to sell an approx £120k house that we currently rent out.

I have plenty of time to give notice and can’t sell until the fix finishes on the mortgage.

Is it better to market it with the tenants still living there? Thus keeping the mortgage paid and the council tax. As our council only gives 1 month free if unoccupied.

Or should I foot the bill for the council tax and mortgage until it sells empty.

To be fair about half of the sales in its area goto BTL so it might be easier to sell tenanted.

Debtslayer

Would your current tenants want to purchase the property if they are able to?
Are they good tenants? If they are good tenants I'd be more inclined to try selling the property as tenanted, as much for their sake as yours (bills still being paid)

missile

When does fix end?
What does contract say re notice?
I would discuss with tenant, before deciding.

Council tax will be least of your expenses

Superclarkkent

Is the tenant likely to move out once notice is served/expires? Will they stay put until you've gone through the courts to evict them? If the latter, it'll be very hard for you to sell (unless selling to another BTL landlord) as it'll take an age to get them out.

saajan_12

Get a few EA valuations and look at local sold (not for sale) prices based on selling tenanted to a BTL investor and selling vacant to an owner occupier.

If you sell vacant to an owner occupier, you may need to serve notice (2 months), get a possession order (1-2 months), apply for bailiffs (1-2 months) and then make significant progress on your sale as many buyers won't exchange or even invest money in surveys etc with tenants in situ (3-6months). That could be anywhere from 3-12 months of paying the mortgage and eviction costs with rental income for only part of that time.

Alternatively, if you sell to a BTL investor you may achieve a lower price as your pool of demand is restricted and a BTL investor would likely drive a harder bargain than a prospective owner occupier who falls in love with the house. However selling to another LL is only feasible if your current tenants are

a) amenable to viewings (perhaps in return for assurance that they won't be evicted soon or a rent reduction); and

b) good track record of rent on time, no property damage so a LL would want to keep them on rather than evicting and choosing tenants themselves.

I would find out the difference in expected selling price between BTL and vacant from EA valuations and local sold prices to see whether the costs to evict outweigh the higher price.

G_M

Speak to the tenants.
If they wish to buy, this may be ideal for all concerned.

Selling to another landlord will give you a lower price, but save some hassle, and help the tenants.

If you market to potential owner-occupiers:

* If the tenants are very understanding /cooperative you may be able to market the property with them still in situ. But there's a risk
* there is no guarantee the tenants will leave when you find a buyer and ask them to. Or when you serve notice.
* there is no guarantee the tenants will cooperate with viewings. And survey. etc
* they might be more likely to if you reduce the rent to compensate for the inconvenience
* some buyers will be put off simply by the presence of tenants, knowing that eviction could well slow down their purchase, and the prperty's future condition is unknown

My advice is to end the tenancy and market the property vacant.

cypher007

the fix ends at the end of March 2018.


tenancy ends January 2018. think there is 3 months notice to give.


the tenants are good and have lived there nearly 4 years.


I was asked by the tenant if I was selling to let know as would make an offer. unfortunately there not in a position to get a mortgage due to issue with previous partner which has still not been sorted 4 years in. so I cant wait for them to sort there personal stuff out for ever. which is a shame as it would be a good deal.


the price sold to BTL or private seems to be similar to be honest.


probably due to the low wages in the area meaning not many first time buyers and more generation rent.

G_M

cypher007 wrote: »

tenancy ends January 2018. think there is 3 months notice to give.

What do you mean you "think"? Surely you know what your own tenancy agreement says? If true, it's a strange clause.
But anyway, any clause relating to notice during the fixed term would be unenforcible by you on the tenants. When the Term ends, the tenants can leave.
The landlord, on the other hand, would have to serve a S21 with 2 months notice, plus, I believe, comply with a contractual term (eg a 3 month notice requirement)

the price sold to BTL or private seems to be similar to be honest.

'seems to be' based on what?

Highly unlikely any BTL landlord would pay open market price for a property with tenants in situ - but I guess you know the area.....

chappers

Even when I was letting property, I would never have bought a property with tenants already in situ

[Deleted User]

Buying a BTL property with tenants in situ might have a different price to an empty BTL property. I'd look for a more exact idea. Ask estate agents who are local to the area?