Selling my house with tenants in-situ

moneybunny123 · 19 January 2011 at 10:36AM

Hi, I'm new to this forum but I'm hoping someone will be able to help me.

I currently rent out the house I used to live in (that I was unable to sell a couple of years ago when the market first took a nosedive). A young woman lives there with her 2 kids and she pays her rent every month without fail. I want to sell my house as I have a fair bit of equity tied up in it that I want to put towards other things (I'm expecting my second baby and want to put the money to buying myself a bigger home)

I could put it on the open market with her still living there, but feel that if she doesn't want to leave, she may make it awkward when people come to view the house. If I evict her, I wont be getting any rental income but obviously will still have to pay the mortgage - I simply can't afford to do this.

So, I want to maybe try and sell it to an investor who will buy the house knowing that there is a good tenant who pays regularly and takes care of the place. A sound investment! Is there anywhere, an Agency for example, that specialises in selling rentable homes with tenants in-situ?

Thanks in advance.

poppysarah · 19 January 2011 at 10:45AM

Speak to local EA. They may have landlords on their books looking to buy.

Of course if you know any local landlords you could approach them directly.

Gwhiz · 19 January 2011 at 11:01AM

Any buyers solicitor will demand vacant possession so you will not be able to exchange on a sale without the tenant out anyway.

auroan · 19 January 2011 at 11:11AM

Don't expect to be able to have viewings happening while the tenant is living in there. She has a legal right to quiet enjoyment of her home, which in the eyes of the law being interupted with viewings isn't quiet enjoyment.

Also with a tenant in situe, you will not be able to sell the property quickly if you did get a buyer as you'd need to give her min 2 months notice to move.

moneybunny123 · 19 January 2011 at 11:15AM

That's why I want to try and find someone who will buy it who WANTS the tenants to stay. Because I don't really want to evict her. She pays her rent, and takes good care of the place. AND, if she knows she will stay living there, I think she'd happily let prospective buyers look around. The alternative, as she knows, is that i have to evict her and then sell it empty.

silvercar · 19 January 2011 at 11:18AM

mandbaby wrote: »

That's why I want to try and find someone who will buy it who WANTS the tenants to stay. Because I don't really want to evict her. She pays her rent, and takes good care of the place. AND, if she knows she will stay living there, I think she'd happily let prospective buyers look around. The alternative, as she knows, is that i have to evict her and then sell it empty.

Your problem is that you are narrowing your options. Out of the people looking to buy property at the moment what percentage are looking for a property with a tenant in situ? Probably about 10%. So you are ruling out 90% of your potential buyers.

Gwhiz · 19 January 2011 at 11:19AM

theartfullodger wrote: »

Not always: I bought a house with tenants from another landlord... it does happen... (No I'm not buying now..) - but expect the selling price to be less..

Did you wan to keep renting it out? It's fair to say that in MOST cases vacant is required.

moneybunny123 · 19 January 2011 at 11:21AM

I want to sell it. I need the equity far more than I need the small amount of profit it gives me each month. But I do hope that the tenant can stay as I feel guilty for evicting her. Not only that, but what if I can't sell it quickly once she's gone? I'm stuck paying a mortgage with no tenant to cover the cost. Aaaaarrrghh!! I just want to sell the damn thing!

N79 · 19 January 2011 at 11:23AM

LLs often buy houses with Ts in but they are normally bought through fairly informal networks - if I want to buy properties with sitting Ts I do not go through the normal high street agents but use contacts in the local LL world.

The problem for most "accidental" LLs is that they are not really part of the LL business world (as we often see on these boards) so their only realistic opportunity to sell is on the open market. The open market requires vacant possession.

OP - talk to your Ts about what you are doing but ultimately you will probably have to evict them and sell on the open market. That is the "normal" approach and anything else will result in a lower price.

moneybunny123 · 19 January 2011 at 11:27AM

N79 - that is good advice, thank you. It makes perfect sense, but doesn't really help ME, now. You mention landlords using informal networks. Such as? This is exactly the sort of thing I need to find out, but I don't know where to start.

I have emailed a few local letting agents to ask if they know of any potential landlords that would be interested. Other than that, I have no idea. You have said that potential landlords probably wont go through agents, so now I'm scuppered!!

N79 · 19 January 2011 at 11:29AM

mandbaby wrote: »

N79 - that is good advice, thank you. It makes perfect sense, but doesn't really help ME, now. You mention landlords using informal networks. Such as? This is exactly the sort of thing I need to find out, but I don't know where to start.

I have emailed a few local letting agents to ask if they know of any potential landlords that would be interested. Other than that, I have no idea. You have said that potential landlords probably wont go through agents, so now I'm scuppered!!

Are you an active member of your local affiliate LL association (ie our trade bodies)? Are you active in the local business scene (be that chamber of commerce or local business groups)?

Of course the answers are no, so your only realistic (and your best) option is to sell on the open market. This requires vacant possession which requires an eviction.

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Selling my house with tenants in-situ

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