Selling a property when let out

detomassino

Dear All,




I would like to ask you for an advice on how to most effectively sell a property which is rented out.




I had to move out of my house following work, now it seems I won't be going back and thinking of buying a property in my new area.


The house has been rented out on a 12 months AST, now I am in the last 7 weeks of the contract. Reading the AST, the tenant can leave at the end of the contract without giving a notice. If I initiate the proceedings towards selling the house now, he will most certainly do so. Then the property will be left empty while still on the market, so I will have to pay for the mortgage.


What is the best way to prevent this and have tenant in the property until it is sold?



Best regards,


T

takka

You can only sell once the tenant has gone unless you are selling on to another land lord.

davidmcn

The usual advice here is that it's best to have a tenant out of the property before you start marketing it, as their presence will deter buyers (who won't trust the tenant to leave on time). It also means you don't have a reluctant occupier obstructing viewings etc.

hazyjo

Not really advisable to sell with a tenant anyway. I doubt they'd find somewhere on the day they receive notice, so you probably have a few weeks.


Try to get a buyer quickly and price realistically, that's all you can really do. Short chain would help too. Can't always really predict these things though, sometimes it's better to accept a decent offer and get things moving.


They'll soon know about you selling anyway as presumably the EA will be round to take photos, and they may not want their stuff in those pics so that may be another reason to think about selling empty.

AndyTails

The best way to have a tenant in the property until sold? Find a local landlord (all estate agents will know some) who'll take it off your hands with a sitting tenant.

Don't expect full market price from the landlord.

You'll probably make more money by giving your tenant notice and then having a few months where you're paying the mortgage before completion. But if it takes a while to sell you won't. And I don't know whether your finances can afford the mortgage in the meantime.

Also, I wouldn't be so sure that your tenant will up sticks as soon as he realises it's on the market. Your tenant might prefer to stick around rather than move, and hope that you can't sell.

Another option is to negotiate with your current tenant: if you'll stay while it's on the market, you can stay at reduced rent. Then your tenant will want to stay because of the reduced rent. NB Make sure you write it as "3 months at {reduced price} then increasing to {market rate or maybe even higher}", otherwise your tenant really won't want to leave and might stay until you go through the full eviction process. If after three months you both want to continue the reduced rent for longer, you can always sign a new contract that puts the price increase back further into the future.

So there's no magical solution I'm afraid. You pay your money and take your choice... But the "sensible" choice, assuming you can afford it, is to get your tenant out and then sell, to avoid either a tenant who won't go or selling below market rate.

AdrianC

detomassino wrote: »

What is the best way to prevent this and have tenant in the property until it is sold?

There isn't a good way.

Remember that as a landlord, you can only give two (full rental period) months notice to a tenant. They may then not move out when that notice expires. You then need to take them to court to regain possession.

Meanwhile, your buyer - who was expecting to be able to exchange contracts - has got bored and gone away.

This is another one of those "cake and eat it" situations. FAR better to start marketing with vacant possession, accept the costs of doing so as part of the fully-informed business decision you made last year, and set a reasonable asking price so it doesn't linger on the market.

takka

Also you need the tenant to agree to even let an agent in to take pictures etc.
Then they get the agent on the phone asking if they are available to be there
for viewings every other day..Had it myself.

[Deleted User]

Although you bought the house, remember its the tenant's home.

It might be wise to have a friendly chat with the tenant and discuss options with them. They may be able to move out easily, they may not. You may need negotiate how it will be handled. As tenant who had to put up with the uncertainty, viewings etc, it wasn't a pleasant process, quite invasive.

You also need to look at your finances as see if there is a way you can manage without a tenant in place. Its likely there will be a period when there will be no tenant as when you sell a place, the buyer's solicitor should make sure exchange will only happen with vacant possession. Unless, as already explained, you sell to a LL who wants a tenant in place, but then it will likely be for a lower price.

G_M

Serve a S21 Notice now.


When the fixed term ends, if the tenant leaves, start marketing.
If the tenant stays, apply to court for possession and evict the tenant. Then, 3 months later, when the tenant finally leaves, start marketing.


Forget about marketing while the tenant is still there.

lookstraightahead

You can't have your cake and eat it! It's the tenants house for now - what do you expect them to do when it's in the market? Show people around? Move out quickly? Keep it tidy? Not have guests? Just serve notice and take the hit. It's not fair!

Thrugelmir

detomassino wrote: »

Then the property will be left empty while still on the market, so I will have to pay for the mortgage.

Always a risk that the property wouldn't generate any income for various reasons. Rather late in the day to be concerned about this now.

Hopefully you've been declaring the income. Or your problems could get far worse.