Selling With Tenants

ST73

Will I lose money by selling my house to an investor (with good long term tenants) rather than as a normal empty house sale? 

theoretica

Ask a local estate agent who knows the area and market for that type of properties.  Will it be sought after by investors?

ST73

theoretica said:

Ask a local estate agent who knows the area and market for that type of properties.  Will it be sought after by investors?

The estate agent said it was worth putting it on the market for investors but I just wondered if they would try and offer me a lot less as they are business people. 

caprikid1

Selling to investors will mean you have less buyers, basic economics tells you less buyers = lower price.

Investors are about numbers and head, people looking for a home are more about heart than numbers.

There might not be much difference and the time with it empty could easily make up the difference.

Do your research on what the house is worth and see what offers you get, always will be a narrower market though.

Alderbank

ST73 said:

Will I lose money by selling my house to an investor (with good long term tenants) rather than as a normal empty house sale? 

Just to clarify, are you saying that this house is currently let to good long term tenants?

eddddy

ST73 said:

The estate agent said it was worth putting it on the market for investors but I just wondered if they would try and offer me a lot less as they are business people. 

The problem is that estate agents will almost always say that.

• If they advise you to put the house on the market with tenants - there's a chance you will sign-up with them immediately

• If they advise you not to put the house on the market with tenants - there's no chance that you will sign up with them immediately. At best, you might sign up with them a few months in the future.

Maybe ask a few other local estate agents in more general terms. Maybe say something like you're thinking of selling in 6 to 12 months. And should you aim to get the tenants out in that time?

TBH, in my experience tenanted properties tend to sell for less than vacant properties - but perhaps the question is "How much less?". It depends on the rental yield, the property, the location, etc. Maybe you're happy to take a small hit, in order to get the property off your hands sooner.


Maybe there's no harm in putting the tenanted property on the market for a few weeks at a price you're willing to accept, to see what happens. But make absolutely sure that it's a fully 'no sale, no fee' estate agent's contract.

And you might have to resist pressure from the estate agent to reduce the price and/or accept a low offer.

subjecttocontract

1. I was always under the impression that any buyer with a mortgage would need vacant possession and therefore selling with a sitting tenant would require a cash buyer.

2. An investor buying with a sitting tenant gains the advantage of no initial void after completion. They don't have to market, advertise, pay lettings agents etc etc. So any price advantage might well swing back in favour of the seller.

ST73

Alderbank said:

ST73 said:

Will I lose money by selling my house to an investor (with good long term tenants) rather than as a normal empty house sale? 

Just to clarify, are you saying that this house is currently let to good long term tenants?

Yes, they have been there 10 years and look after the house as their own. Apart from a small arrears during covid which they caught up on quickly, there have never been rent issues. I just do not have the time or energy to look after a second house when jobs need doing, although the tenant does a lot of them. I suppose deep down I don’t want to throw them out. 

theartfullodger

Estate agent may well have (probably ? ) tame "investors" who might also provide backhanders.

Usually price (and number of people interested) greater for a place vacant, emptied of tenants stuff & and repairs sorted. No chain.  Can sell v quick if punters interested.

That's what I've done twice successfully in last 3 years , plus another house on sale in last 2 weeks.

(Proudhon etc etc etc...)

jj_43

Yes most likely, valuation would be based on yield not desirability.

rexmedorum

Might be worth asking the tennant if they are interested in buying?