Wait… did we just say selling with sitting tenants might be your only option right now? Well, that’s assuming you want to sell at all, that is.
Anyway, I know what you’re thinking; it’s quite a bold statement for us to make.
But, unfortunately, with the logistical challenges we’re currently facing during the COVID-19 lockdown, and the recent legal changes in tenancy termination, it’s also just a reality – perhaps for the best part of the rest of the year.
As estate agents specialising in tenanted property sales, myself and my business partner, Ross, have found ourselves in a unique position to be able to help those looking to free up equity in tenanted property during the lockdown.
With over 35+ years of combined experience in property, we’ve been giving advice and answering questions for those who are looking to sell – whatever the reason – during this time.
Which is why we thought this would make a particularly great blog post.
After all, it IS still possible to sell during lockdown… it’s just that selling with sitting tenants might be your only option. We’re going to explain why, below.
PLEASE NOTE: This is a constantly evolving situation, so it’s our aim to keep this article updated as more information becomes available. In the meantime, we cannot stress enough how important it is to take COVID-19 seriously. Stay safe, stay in doors!
Why selling with sitting tenants might be your only option
If you currently have tenanted properties you’re thinking of selling, there is one main reason why selling with the tenants still living there might be your only option – at least if you’re looking to sell in the next six months. There’s no getting around it – at least, not without breaking the law.
This is due to the fact that landlords are now required to give tenants six months’ notice (to be reviewed again in September). Here’s the latest information from SAL on the required notice to leave periods.
I should also note that at least whilst lockdown is still in place, it’s impossible to get a home report; something that’s required for selling on the open market. Which means your only option right now is to sell with sitting tenants off-market, and what’s known as a ‘desktop valuation’.
This is something that’s best achieved with a specialist estate agent; someone who is experienced in selling tenanted properties, operates on values of shared success (between buyer, seller and tenant), and has access to a huge list of potential buyers constantly on the lookout for opportunities.
But selling a tenanted property (off-market or on the open market) isn’t necessarily right for everyone.
Is selling a tenanted property right for you?
Firstly, if you’re wondering about whether or not you should sell your tenanted property off-market during lockdown, check out our blog on the subject. It details more about the process of selling during the COVID-19 pandemic.
It also asks the question of whether selling right now is the best option for you. If you can hold off until lockdown is over, it may be that you can get a better sale price on the open market once restrictions are lifted, so you can benefit from more visibility, confidence from potential buyers.
Now, to the issue of whether selling a tenanted property is right for you at all.
It certainly can seem like an attractive (if lesser-known) option, as selling with sitting tenants doesn’t pose most of the logistical challenges as selling an empty home – with no chain to impact on the sale.
It also means that your tenants get to stay in their homes, whilst you receive rental income right up until completion of sale. So, there’s no void utility costs or need to decorate the property – you can simply sell as is, with little upheaval to your tenants.
However, if you’re considering this as a serious option, we’d highly recommend speaking with a specialist estate agent, who can give you some free, impartial advice and help you to make a more informed decision. After all, it’s a big decision to make.
TIP: Wondering whether selling a tenanted property could be right for you? Check out our recent case study, where we’ve explained how we helped a client who was going through the same dilemma.
Advice from the tenanted property pros
If you’re considering the possibility of selling your tenanted property now, with tenants still living there, our advice before doing anything else is to look at the current state of the property. Ask yourself the following questions:
- As far as you know, is the property presentable?
- Is it fully compliant?
- As far as you know, has it been well-maintained by the tenants?
- Are they paying close to market rent?
- Are the tenants having problems with rental payment due to COVID-19?
These are all factors that can make a property as attractive as possible to potential investors. However, it’s not the end of the world if not. Investors will have different goals – some are looking for long-term investments, rather than short-term gains, for example.
By having a good specialist estate agent share it with a huge list of potential investors on the lookout for different opportunities to buy, you’ll have the best chance of getting a good sale price during lockdown. But before you do, just make sure it’s definitely the right move for you first.
To sum it up…
We hope you’ve enjoyed reading. You should now have a better idea of why selling with sitting tenants might be your only option at the moment – and why selling off-market is probably your only option whilst lockdown is in place.
These are challenging times, and you may be considering your options with regards to investment properties you own for a number of reasons at the moment. A good specialist estate agent should be able to help talk you through all of your options.
If you’re looking to get some advice on selling a tenanted property, or your current portfolio, please don’t hesitate to get in touch. And most importantly, stay safe out there!
Written by Chris Wood, MD & Founder of Portolio
Get in touch on 07812 164 842 or email to email@example.com