Are you wondering if it’s really possible to sell your property with the tenants still living there?
The simple answer is: YES you can.
By selling with a sitting tenant, you, the selling landlord, can:
- Keep collecting rent
- Sell your property immediately
- Sell as is, without any extra expense
You’re definitely aware of the the more common way to sell a tenanted property, of course. You have to go through the rigmarole of serving notice on the tenant, then waiting until they leave, THEN getting the property ready for going on the market.
Regular estate agents know very well how to sell vacant property, but the specific art of selling tenanted property is rarely understood.
After many years helping people succeed in property, and thousands of great chats with landlords, I’m going to provide you with some key insights about how selling tenanted property is done (it’s actually quite simple).
I’ve also included some tips on how to make the process is smooth as possible. So, make sure you’re sitting comfortably.
How do you sell your property with the tenants still living there?
It’s essentially the same as selling any other type of property; tell as many people as possible about it! Seems a bit simple, but the more eyeballs that see your flat for sale, the more chance it has of selling.
However, the big difference when selling a tenanted property is that to sell your flat or house with the tenant still living there, you’re most likely to sell it to a property investor, who will become the new landlord.
Psst! You CAN sell tenanted property on the open market. You can have nice photos of your property on good websites and have everything presented in a professional way, with a surveyor’s home report.
Many people think selling your property with the tenants still living there means it must be a shady off-market deal (private sale). That’s not the case! It can very much be an open market sale, using a good specialist estate agent who knows where the property investors are, and who is trusted in this area.
Advice from a property pro
There are clear benefits to buying an already tenanted property, and those should be made clear when promoting your property for sale. First of all, property investors need to know that the tenanted property for sale is fully compliant and the current tenancy is in full order.
Earlier this year, I met a landlord who was keen to sell with the tenant in place. With the tenant’s permission, we had an initial meeting at the property, and it gave me the chance to see the condition of the rooms and the building.
It was a great flat in a popular location on the west side of Edinburgh. And it was clear we could help! During the meeting I noticed the lack of heat sensors and smoke detectors. Then, after further discussions, it transpired there were a couple of safety certs that were missing.
No problem! We advised what needed to be done, the landlord got the certs with guidance and within a few weeks we were actively marketing the flat to potential buyers on the open market.
In the end, it took two weeks to sell, and then another six weeks to complete. All told, from beginning to end the selling landlord had the sale money in their bank in less than three months.
Expert insight: The buyer, like you, has financial goals that are related to the property. Essentially, the buyer will want their investment to be an asset, i.e. one that provides revenue, and doesn’t turn out to be the opposite; a liability (so, fully-compliant, good rent track record).
TIP: For more helpful advice for landlords, check out the Scottish Association of Landlords (SAL).
Know the pitfalls, and avoid them…
Firstly, we recognise that there are a number of ‘moving parts’ in the process of selling. If one or more of the moving parts fail then it spells trouble, so it’s essential to keep things well oiled; otherwise known as ensuring good communication.
Essentially, the process of selling any – vacant or tenanted – property involves the following people:
- The buyer
- The buyer’s solicitor
- The buyer’s mortgage broker (if using)
- An estate agent (if using)
- Your chosen surveyor (if using)
- Your solicitor
When selling a tenanted property you could have the following extra people involved:
- Buyer’s sourcing agent (if using)
- Buyer’s letting agent (if using)
- Your letting agent (if using)
- Your tenant
If you choose to use an estate agent to sell your property with the tenants still living there, then it is their job to get you to a successful completion of sale. They MUST know how selling with the tenant still in place will impact the job of each of these property professionals, and communicate effectively.
Technical bit: A new lease is not needed when the property ownership changes from you to the new owner. Sometimes it’s a good idea to set up a new leaseat that point, but in reality a simple letter to the tenant advising on the change of landlord is enough.
I could write pages and pages about this whole process! There is a lot to consider when selling a tenanted property but it’s 100% possible. It’s something myself and my business partner do every day for our clients.
Selling tenanted property is a great solution for many landlords. It’s appreciated by tenants and property investors see the value in getting ready-to-go property investment. It all comes down to how you do it.
If you think selling your tenanted property might be the best way forward for you – or you have any questions – don’t hesitate to get in touch with me. I’d be happy to help!
Written by Chris Wood, MD & Founder of Portolio
Get in touch on 07812 164 842 or email to email@example.com