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Can you "easily" sell a tenanted property?


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So, first post in the forum - be nice!

 

Long story short, my wife and I own a rental property (3-bed house in SE18, London) that is tenanted for the next 11months. As we've slowly explored the challenges posed by the new tax regime on landlords, we believe our best move is to continue investing via a limited company...however it won't be cost effective to move our current property to one (switching ownership between us isn't optimal either).

 

Question then is "can we sell a property with tenants in it"? Does anyone have experience of this? It clearly lessens the target market just to BTL investors - does this have a hugely detrimental impact on price?

 

All thoughts gratefully received!

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the majority of tenanted sales i have seen are through the auction and it does seem to make a difference to the sale price - as the buyer has no idea what issues there may or may not be with the tenant. If you want to maximise your return the best bet is usually to sell empty - just my expereince from the midlands and situation could be different elsewhere. Personally I would not buy tenanted myself due to the unknown risk factors - less of an issue at the high end though

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1 hour ago, pauldavidthomas said:

I've bought tenanted property. If your selling to an investor, as long as they don't want to do capital works on the place, should not be a problem. However, you cut out the whole market of 'normal' people - do you want to do this ?

Thanks for replying and sharing thoughts Paul. Re cutting out normal people, I think that depends on probability of attracting an investor's bid...which is the impossible, unknown question (without listing it!). 

 

More thinking to do, clearly...

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I think talking to an agent about the possible return from having it with or without tenants would help, as they should know.

 

After doing this, if it's in an area where other landlords rent places out, then why not put your own board up and try a private sale. My last purchase didn't involve an agent.

 

Failing that, once you have a figure you are happy with, why not offer it here. Some more seasoned people might want to pay less, some less so could pay more. But the advantage is, you've done the hard work and have got an earning asset up and running.

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I am currently buying 2 tenanted properties - taking forever as so many more hoops to jump through

 

I am also buying a property with vacant possession, literally taken half the time.

 

Other factors to consider -

 

Very little in selling in SE and the market is incredibly slow, houses are just not selling near me in N/NW London and have been on the market for 6-12 months+.  Uncertainly due to Brexit, stamp duty and tax changes have shrunk the number of buyers considerably.  It is however a good time for an owner occupier to buy as they can afford to be picky and make low offers, I haven't seen the market since bad in London since the couple of years after the credit crunch until it kicked on.  Prices are however much more now than they were then and affordability is squeezed a lot, house prices have risen around 80% since 2012 in my area until the market softened and dropped in the past year or so, I would estimate by 10-15%.

 

A tenanted property will be sold to an investor and we are a mercenary bunch so don't expect them to pay top dollar. If you want maximum value by selling to an owner occupier then it should have vacant possession and be staged in tip top condition. By being tenanted you're cutting out a massive portion of buyers, in particular the type of buyers who may fall in love with your property and pay what you feel it is worth.

 

Depends what you're looking for really, best of luck

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Hi it is possible to sell a property with the tenant in it. 

However it would depend on whether this would satisfy the mortgages criteria of the incoming purchaser.

Some mortgages require the property be vacant possession upon completion even buy to let mortgages so a cash buyer may be preferred.

 

Regards

 

Marc. 

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