What are the Alternative Routes to Selling Your Tenanted Property?

There are many potential routes you can choose to get to your intended destination. The same is true in property. 

If you’re considering selling your tenanted property, you may be feeling a little confused about the best way to go about it, or if it’s even possible.

As one half of Scotland’s only estate agent for tenanted property, I can tell you that not only is it possible, but that there are several ways you can do it, which I’ll explore in this blog. 

Selling your tenanted property may seem like something you’re reluctant to do on account of your tenants, but you can ensure a smooth transition by communicating well with your tenants during the process. 

In most cases, you’ll be selling the property as-is so you won’t even have to renovate so you’ll also be sparing your tenants further disruption, which is definitely a good thing

What are the alternative routes to selling your tenanted property?

The best way to sell your tenanted property is to find a way that works for you, so let’s dive in:

Sell on the open market

Selling on the open market is actually one of the best ways of selling your tenanted property, as it ensures your property gets the biggest audience. 

You can market the property to its full advantage and maximise the ability to get the best sales price you can. 

One of the key advantages of selling on the open market is the tools at your disposal. With the right estate agent behind you, there will be a good selection of photos, a good description and that all-important client base.

Of course, this does mean that marketing assets such as photos, floorplans and home report need to be created but that won’t be a problem for an experienced estate agent. 

Yes, a home report can range from £300 – £1000 but is still a definite benefit to the seller as it offers valuable reassurance for the buyers. I must stress that it’s also a legal requirement for a property to have a home report if listed on the open market. 

The process isn’t a quick one, and you’ll have to take time to reassure your tenants during what might seem like understandably, an uncertain time (understandably) not to mention co-ordinate viewing times with them and ensure as little disruption as possible. 

If you’re a private person, you may not be keen on seeing details of your properties publicly available  – some people, understandably, aren’t keen on others knowing their business. 

Selling on the open market is certainly not the cheapest option with estate agent fees and conveyancing costs to consider, but a good estate agent is invaluable, and the home report includes the property’s all-important EPC (Energy Performance Certificate). 

Psst! The open market also includes promotion using online platforms such as Facebook, so make sure you still have that all-important home report! 

Sell as part of a portfolio (if applicable)

If your property is one of a portfolio that you’re planning to sell, you may not have been aware that you can sell your entire portfolio in one transaction, so this may come as a bit of a surprise. 

Before you consider that possibility though, let’s make sure it’s the right choice for you. As with most things though, there are pros and cons 

Let’s start with the benefits. Selling a portfolio as part of a single, off market transaction is undoubtedly less hassle than selling individually on the open market, You won’t have the cost of several home reports to consider, nor will you have a pile of solicitors fees.

And of course, the sale would generally be concluded much faster, possibly in as little as a few weeks, so. If time is a factor, that will definitely be good news.

If you were, say, selling up and moving abroad, you may just want to make a clean start, but if you’re just finding the management of your portfolio a little unwieldy, you may want to consider a less drastic approach. 

TIP: One important point against selling your portfolio is the likelihood of capital gains tax. Selling all your properties in one year could land you with a massive tax bill, so ask yourself if you wouldn’t be better off selling your properties individually. 

Ultimately though, the final decision is yours, so ask yourself, will selling my portfolio in one go accelerate the achievement of your goals? If not, and speed isn’t an issue you’d maybe be better selling individually.

If you’d like to know more about selling your portfoliotake a look at a blog we’ve written and see if it’s something that interests you. 

Sell to your tenants

If you’re on really good terms with your tenants, the decision to sell can be a difficult one. You’ll be anticipating an awkward conversation at the very least, and lots of questions. But what if the tenant is in a position to buy the property from you?  

I’ve personally witnessed this, and it really is one of those all-round win-win scenarios. A nice solution where the tenant is in a position to make their home a permanent one and you get the satisfaction of knowing you’ve done a good thing.

Of course, it’s still a business transaction in the end so If selling to your tenants do get a survey done so you know what the property is worth. You’ll also have the peace of mind in knowing that you’re passing on a property in good condition.

Often though, this is about less than making money and more about doing a nice thing

Just think, no selling on the open market, no viewings, no hassle, it’s pretty much a dream scenario. 

I’m trying to present a balanced view here but I actually can’t think of any downsides to selling your tenants, to be honest! As long as both parties are happy and all legal avenues are followed correctly, it should be smiles all round. 

Sell off market 

Selling off market will always be an attractive prospect for those who can’t be bothered with the hassle of selling on the open market. It’s a much faster process that can be attractive to both seller and buyer, but there are some key aspects to consider..

When selling your tenanted property off-market you don’t legally require a home report, but you might wish to get one done as some buyers may be wary of buying your property without one.

A home report will also be useful in ensuring you get a good sale price and will leave you less vulnerable to potential buyers who claim that your property is worth less than it actually is. 

It goes without saying that even if you’re in a hurry you don’t want to take the first offer you get. Always take the time to consider whether the sum offered is a fair one.  

As with most things in life, be wary of things that seem to be too good to be true. A buyer may see what looks like a good deal on Facebook property investor groups, but if you look closer there’s a telling lack of information, so be as transparent as you can.

It’s usually the buyer who will be getting the survey so you may not have access to that information and never know what the real value of the property is. 

If you’re concerned that you may be losing out, consider whether to sell on the open market where you can promote the property to its maximum potential.  

TIP: We’ve explored the pros and cons of selling property on the open market vs off market in a recent blog. 

Sell at auction

Auctions are now beginning to shake off their rather shabby image as a source of repossessed properties at bargain basement prices.

Due to some of the many property shows on daytime tv auctions have been growing in popularity and the image of auctions is moving away for from its former ‘last resort’ stereotype.

We’re also living in the age of ebay where it’s become the norm to bid for anything from a pair of shoes to a new car – so why not bid for properties too? 

The downsides of selling your tenanted property at auction is that there may not be a dedicated channel of communication between the auction house and your tenants.

A change of landlord can be an uncomfortable time for tenants, so you would have to make sure they were kept in the loop. 

All told, it seems be a fairly efficient process, and certainly useful if you’re looking for a quick sale. It would be good to remember that buyer’s fees can be quite high – up to £2000, and that can impact on what you ultimately end up getting. 

If you decide to explore this route, and like what you see on their webpage, make sure to check out the reviews online and generally get a feel for their reputation. Pay particular attention to customer service and a smooth transaction process.

Property buyers (‘We Buy Any House’) 

You may have had a card through your door or seen adverts locally at traffic lights stating ‘we buy any house’. Sound familiar? 

Many property buyers find their targets through people contacting them looking for a quick sale, so if this is similar to your situation, a property buyer might be what you’re looking for. 

The main benefit of this method is speed – there is no setup period or advertising needed, no viewings. You’re effectively selling off-market, so the sale could be concluded in a matter of weeks. 

But there are downsides. The lack of hassle and prospect of a quick sale can seem attractive but there is a concern that without advertising the property on the open market you would be accepting a lower price than the property is worth. 

While we don’t see anything wrong with having a means to get an unwanted property sold quickly, in my experience most property buyers deal with vacant possession, you would want to know that the whole process would be handled correctly and sensitively. 

Assisted sale

Assisted sales aren’t suitable for everyone and they generally only apply to a specific circumstance, which is a property that would benefit from a refurbishment to significantly improve its value. 

The ‘assisted’ part refers to the fact that an investor is often brought in to fund the cost of the refurbishment, and then benefits from the profits once the house is sold

As a tenanted property specialist,I wouldn’t normally recommend assisted sales as they are best applied to vacant properties, I thought this would be an interesting option to add as you may not have heard of it. 

An assisted sale might suit you if your tenant is moving out and the property is in need of some work. It’s a better option if you’re looking to sell quickly, as you’d be offered the price of the property as-is, not what it would be worth after refurbishment. 

So, if you have a tenanted property in good condition and the tenant isn’t going anywhere, selling on the open market would be a better option for you. 

Just to reiterate, any tenancy would have to be ended first as refurbishment could only be done in a vacant property. If you factor in a six month notice period your void period could be considerable. 

There would also be no guarantee that the property would be attractive to tenants once refurbishment completed. 

Sourcing agents

If you’re not sure where to turn when you decide to sell your tenanted property, a sourcing agent could be just what you need. Typically hired to find a client’s ideal property, they are ideally placed to match you with a buyer. 

Sourcing agents can be linked to estate agents, so their potential reach of buyers could be extensive. Do check though, that they have experience with tenanted properties, as this may be outwith their knowledge base.

A well-connected sourcing agent, especially one who deals with tenanted properties, could be an absolute gift in terms of finding a buyer, and minimising the process for you and your tenant.  

Find out more about the benefits of a sourcing agent here. It’s written from a buyer’s perspective but contains useful information that should help you decide whether they could help accelerate the sale of your property. 

Advice from the property pros 

Who knew there could be so many ways to sell your tenanted property?

As always though, we thoroughly recommend that you do your research  – if you’ve not gone down a certain route before, speak to someone who has. They will usually be happy to explain the process to you. 

Check online reviews to establish whether a company is one you are happy dealing with, and don’t be afraid to ask questions.

Hopefully, you’ll be in a position to take the time to decide the best option for you, but even if time isn’t on your side, you shouldn’t feel in any way pressured to proceed with the sale.

 If you do feel pressured – walk away! There are too many decent and trustworthy companies to bother with the few who aren’t, so trust your gut. 

In summary… 

Thanks for reading and we hope you found our blog on some of the ways you can sell your tenanted property interesting and helpful. 

It’s absolutely true that any company worth dealing with won’t hesitate to put you at ease. You are, after all, making a big decision in selling your tenanted property, it’s not something that happens every day! 

Remember, we’re always happy to help, so if you have any questions for Ross and myself, why not ask for a free, no-strings consultation?

Written by Chris Wood, MD & Founder of Portolio

Get in touch on 07812 164 842 or email [email protected]