Date Published 01 June 2017
In a market where demand is far outstripping supply is selling your property with a tenant a shrewd investment or a marketing headache? You will of course be drastically reducing your potential market as you'll be limiting your interested buyers to Landlords alone. However, as you close the door on first time buyers and families you can console yourself with the monthly rental income right up until the point of sale.
The added bonus for your buyer is that they will not have to endure the hassle of marketing for tenants or even dealing with letting agents. They too will walk into an immediate rental income as soon as the sale is completed.
So, what is not to like? Well, selling a vacant property is obviously a lot less complicated than a tenanted property but if you have good tenants who have never caused you any trouble and have always paid their rent on time there is considerable value in retaining them for a future landlord. However, issues such as the return and registration of the deposit, an impending new Lease Agreement and potentially a rise in rent to reflect current market rates means that a historically good tenant may well take on another guise.
To avoid any potential pitfalls when title passes, albeit the problems pass with it, speak to your tenants and keep them updated on all developments that affect their tenancy. More often than not, problems arise due to a lack of communication and a transparent and open approach may well keep relations sweet and your tenants compliant. After all, they have always been good tenants and there is no reason for that to change unless they are kept in the dark.
A note of caution if you are selling to a fairly inexperienced Landlord who may need a mortgage to complete on the purchase is that not all mortgage brokers are keen on tenanted properties. Ensure these issues are ironed out early on to prevent last minute complications and unnecessary uncertainty for the tenants.
Finally, if there is no interest in your tenanted property and you are not consumed by tenant loyalty you could speak to your tenants to agree a way for them to remain in the property up until sale on terms that benefit you all. That way you will keep your monthly income, the property will be occupied by compliant tenants and the pool of interested buyers will increase and hopefully so will the asking price. A win-win situation for all!
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