If you’re considering investing in property, you may be wondering… why would landlords want to sell with the tenant still living there?
It’s a very good question, and one I want to take the time to answer properly below.
And the reason why I want to answer it is because here at Portolio, we’re always speaking to potential buyers who are either curious – or even downright suspicious – about why someone would choose to sell a tenanted property.
But I can assure you right now that it’s all completely above board – indeed, there are some very clear benefits of selling a tenanted property that we’ve outlined in previous blogs (and that I’ll go into in more detail below).
TIP: There are also plenty of advantages of buying a tenanted property for the savvy investor, as you’ll discover via our recent post.
Below, I’m going to talk you through some of the main reasons why landlords choose to sell with the tenant still living there. But first…
Why do people sell investment properties?
Anyone looking to sell a buy-to-let is looking to release equity. And there could be a multitude of different reasons as to why someone would find themselves selling. Perhaps they’re fed up being a landlord, are moving away, or need the equity for business or personal reasons.
Although a lot of people look at property as a long-term investment, it goes without saying that plans tend to change over time – especially in recent circumstances, with a whopping 48% of landlords reconsidering their position when it comes to buying and selling property.
Whatever the reason landlords decide to sell, they are often then faced with the decision of whether to serve notice to their tenant, or (if they’re aware of this option) sell with the tenant still living there.
Which brings me to my next point…
Why sell with the tenant still living there?
There are a few different reasons why someone would want to sell a property with the tenants still inside; and I want to assure you that it’s NOT because they’ve got a bad tenant. Usually, it’s the opposite.
In most cases, you’ll actually be able to see the rental track record before you buy, check to see how well the tenant has been taking care of the property, and ensure there has been no antisocial behavior orders issues with the tenant. So, why sell this way?
Selling a tenanted property is generally a hassle-free way for landlords to release equity faster, with no void periods, whilst ensuring that they can still get a fair sale price (at least when going through a reputable specialist estate agent).
It also means not having to serve notice to their tenants, as nine times out of 10, the tenancy agreement simply changes hands. Meaning they’ll enjoy continual rental income right up until the completion of sale.
All of this essentially means removing a lot of the risk associated with selling an investment property – whilst also being able to sell the property ‘as is’ (fully-compliant, with no refurbishment work required).
TIP: To get a better understanding of why selling a tenanted property is such an attractive option for landlords, check out our blog on the subject.
Advice from the property pros
Buying a tenanted property doesn’t suit everyone; some people like taking their time with the excitement of the sales process, and getting to start afresh with an empty property; like a blank canvas.
They get a lot of pleasure from getting their hands dirty, and putting the time and hard work into doing up the place ready to get a tenant in, and to think about selling on later down the line. It’s a passion, rather than simply a means of income.
For those types of investors, buying a tenanted property would mean bypassing all of the initial fun.
At this moment, the property market is very buoyant. Buying tenanted property means you’re not competing against homebuyers and trawling through the likes of Rightmove – as it’s a completely different market.
TIP: Investing in bricks and mortar is seen as a much more reliable investment than the stock market, which is really quite volatile at the moment.
There’s also the huge benefit of getting to see that the rent has been paid on time, and to know you’re getting a reliable tenant with a fully-compliant property that has no hidden issues. It’s an all-round easy win (if that’s what you’re into).
If you’ve made it this far, thanks for taking the time to read. If you’re looking into buying investment property, I hope I’ve managed to give you a better idea of why some landlords sell with the tenant still living there.
There’s nothing unusual or suspicious about them doing so; it’s merely a simpler, easier way to sell a buy-to-let whilst avoiding all of the usual hassle (and void periods) that come with it. What’s more, a good specialist estate agent will NEVER sell a property with bad tenants.
If you’re interested in learning more about enjoying instant rental income when buying a tenanted property, feel free to get in touch.
We’re always happy to answer any questions you may have, during a free, impartial chat.
Written by Chris Wood, MD & Founder of Portolio
Get in touch on 07812 164 842 or email firstname.lastname@example.org