Leasehold flat - how low do I need to go to sell the bloody thing

mcplumb

I have a leasehold flat with tenant in situ. The development has had a very contenious major works program with various FTT, then appeals ...... current situation is major works bill is circa 40k as confirmed by the appeal court.

Obviously due to this issue nothing has moved for years regarding property sales - Rightmove has 5  flats STC going back over a year and after speaking to agents the on going major works bill is the issue. Now the final appeal court verdict has been given the LPE1 should confirm the outstanding amount for major works, this final amount would be settled on completion with prospective purchaser having clean slate (actually positive position due to my payments into sinking fund".

So, I want to get rid of the place - the whole thing has drained me mentally and financially. The local agents are far too "upbeat" and looking at other adds just not telling the truth regarding service charges and lease etc. 

Bullet points are;

Long standing tenant in situ with rent at £525 nett after agent fees

Market value is 125-145k (difficult to judge as no sales in recent times)

Agent is chirpy as ever and going for 135k with tenant in situ, although it just doesn't add up when you factor in service charges


So, do I market to get the correct yield or give notice to tenant and market to first time buyers. In an ideal world I'd market to another landlord, this would be in fairness to the long standing tenant even for reduced sale value. Obviously this would avoid a potential long void period. 

theartfullodger

You tend to get a better price with vacant possession, no tenant.  (With tenant market only landlords and gamblers ).

Can you afford time and cost of eviction & void ?  Certain an s21 would be valid ?  (Google "nearly legal section 21"

mcplumb

theartfullodger said:

You tend to get a better price with vacant possession, no tenant.  (With tenant market only landlords and gamblers ).

Can you afford time and cost of eviction & void ?  Certain an s21 would be valid ?  (Google "nearly legal section 21"

I'm not too worried about a lower price vs a long void. 

So is it case of marketing (with no offers) at decent yield value. I do have the option of "chucking in" some improvements that will only cost me minimal amounts. The current boiler is 12 years old, I do have the option of putting a new one in and giving 10 years warranty. All this would cost me is the price of the boiler (its currently in my garage and needs a home, I'm gas reg so just my time on top) 

london21

To get a decent amount, you will first have to serve the tenant S21 get them to leave to open the potential buyer pull so not just landlords and BTL investors.

You will also have to be patient as the buyers/interests have now reduced with rising interest rates. 

mcplumb

london21 said:

To get a decent amount, you will first have to serve the tenant S21 get them to leave to open the potential buyer pull so not just landlords and BTL investors.

You will also have to be patient as the buyers/interests have now reduced with rising interest rates. 

I'm not too fussed about the sale price, I'd rather lower price with tenant in situ and quick exit route. It's just where to pitch to hit a spot with the interest - My agent is a joker at 135k, the maths doesn't add up. I'd get offers that would fall through

eddddy

mcplumb said:

My agent is a joker at 135k, the maths doesn't add up. I'd get offers that would fall through

The agent should be telling buyers about the high Service Charges before they make an offer - the agent is probably breaking consumer protection law if they don't.

So offers shouldn't fall through because of that.


Estate agents want properties to sell - so that they get their commission. So I'd have thought they'd be urging you to reduce the asking price, if that would solve the problem.

TBH, local estate agents are likely to know more about your local property, local prices, local buyers and the local market in general than anyone on this board.  Maybe ask a few more estate agents for their opinions on price with/without tenants, etc.

mcplumb

eddddy said:

mcplumb said:

My agent is a joker at 135k, the maths doesn't add up. I'd get offers that would fall through

The agent should be telling buyers about the high Service Charges before they make an offer - the agent is probably breaking consumer protection law if they don't.

So offers shouldn't fall through because of that.


Estate agents want properties to sell - so that they get their commission. So I'd have thought they'd be urging you to reduce the asking price, if that would solve the problem.

TBH, local estate agents are likely to know more about your local property, local prices, local buyers and the local market in general than anyone on this board.  Maybe ask a few more estate agents for their opinions on price with/without tenants, etc.

I have been in contact with another seller in the block- agent wasn't open about service charges and surprise, surprise they sale fell through in month 4.

Another local agent is marketing one at 20k North of anyone else...

eddddy

mcplumb said:

I have been in contact with another seller in the block- agent wasn't open about service charges and surprise, surprise they sale fell through in month 4.

So the seller should be giving the agent a kick up the backside for screwing up the sale - and for breaking the law.

And the seller should make sure the agent gives all the info to anyone else who makes an offer.


(And the agent is a fool - they've delayed getting their commission by 4 months. Or maybe they've lost their commission altogether.)

NameUnavailable

Sell at auction.

theoretica

I would think that upcoming major works - even if paid for - would make the property less attractive to someone buying residentially.

mcplumb

theoretica said:

I would think that upcoming major works - even if paid for - would make the property less attractive to someone buying residentially.

The work is complete and a final invoice has been issued. Any outstanding monies will be paid via solicitors on completion. The buyer would start with a clear account and approx 3k in sinking fund per flat. Hopefully all future works will be pretty much covered by fund.