The age old question - selling with tenant ...?

[LesleyAnne]

Hi All, not posted here for a number for years, so hello again to those who may have helped me before ...

I have had my BTL flat for 20 years now, and feel the time is right for me to release the capital and sell on. I currently have an excellent tenant, who is an elderly single guy so I feel a little guilty in deciding to put the property on the market when he is so settled there. I am going to contact him to explain the situation.

I know there can be issues with trying to sell with a tenant in place, and I am also aware that he might not want the upheaval of viewings or the uncertainty of his future there, so he may want to move out anyway.

However, if he is happy to stay for now, I just need to get up to speed with the perils and pitfalls of keeping the tenant. Or would the general consensus here be to give him notice now to and get the property empty first. If so, I have never actually given notice to a tenant in the whole 20 years - they have always moved on through their own circumstances, so can someone please point me towards the correct process as I am sure things have changed since I was last here and up to speed with S21 etc.

Thanks all

[jpkeates]

I have no experience with any of them, but there are companies who specialise in buying properties with tenants from landlords.

As far as I can see their business model is paying slightly less than market value for the property, but there is no estate agent commission and there is no cost to remove the tenant.

So you sacrifice some money for less stress and a shorter time frame.

I don't know if they then evict the tenant or what happens.

Otherwise, this is when it helps to have a letting agent!

[boletus]

there are companies who specialise in buying properties with tenants from landlords.

As far as I can see their business model is paying slightly less than market value for the property

Slightly!? 25-30%* off and the tenant usually ends up leaving anyway.


*Anecdotal, pre-covid

[MAPTON]

Hi Lesley

Would it make sense to speak with a local estate agent? They may have landlords happy to buy at normal prices and have the benefit of a good tenant in place.

Previously, when selling a property, I moved the existing tenants into another of my properties. However, the person who bought the property - at a great price (my benefit!) was a landlord. I recommended a new tenant to him and she is still in place 8 years later.

[ExpertInAField]

Sitting at home doing nothing all day is giving me itchy feet and I want to do things.

Where is your property please?

[jpucng62]

I think it has become far more common to sell with a tenant in situ now and should not affect the price at all. Instant income for the new owner - so I would check he's ok with viewings and then crack on.

All the risk factors are on the buyers side so you should be fine

[jpkeates]

That's interesting, I suspect the opposite.

Previously I have bought tenanted properties, but wouldn't do so now without a huge discount and a lot of extra legal work.

Because the rules around notice are now much tighter, I'd need evidence that everything that needed to be done before and during the tenancy had been done.
And I'm not sure it could be put together in a way that would de-risk it enough - hence the discount.

[LesleyAnne]

MAPTON,

Thanks for reply. I am going to speak to the agents who I originally bought the place through, and who initially used to let it for me. I just wanted to gauge some non-biased views here first as no doubt he will tell us what we want to hear ...

[LesleyAnne]

Sitting at home doing nothing all day is giving me itchy feet and I want to do things.

Where is your property please?

Cornwall, not seaside or tourist spot, but a pleasant quiet town with a lovely community. If I could afford a house there, I would live there myself, but the flat is too small

[LesleyAnne]

Thanks for everyone's comments so far ... how much has changed on the giving notice process, as used to be up to speed with S21 etc and learned a lot from others here, but been somewhat left behind with a great tenant for some many years, so time to do some serious reading of the forum me thinks ...

[flyingfreehold]

tenanted value is minus at least 20 per cent, maybe a bit more because tenanted properties tend to be in poorer repair than owner occupied, although not always.