Selling Investment Property

Selling Buy To Let, HMO and Portfolio Investment Properties

Selling a buy to let or investment property is very different to selling a family home. The sale must be approached as such and, if tenanted, then the sale MUST be advertised to an investor audience.
Types of investment property we sell
  • Traditional Buy to Let
  • Property Portfolios
  • HMOs
  • Student Property
  • Holiday Lets
What to consider when selling
  • Notify your lender. Ask your lender for a settlement figure or balance and let them know whether you intend to transfer the mortgage over to a new rental property, or if you plan on settling the mortgage with the proceeds of the sale.
  • Selling the property with tenants in-situ means the tenant(s) will still have the right to quiet enjoyment of the property during the sale. By selling to another investor the tenant(s) may remain where they are and there is no need to go through any eviction process. This often means there are no restrictions from the tenant’s side for maintenance and viewings of the property.
  • No eviction process means a faster sale. Evicting tenants can be a lengthy process and there is no guarantee that they will leave come eviction day. This can cause further problems both for you, as the landlord and for the sale.
  • Selling tenanted property proves beneficial for you and the buyer as you’ll receive income up until the day of completion and the buyer will receive income from thereafter. The mortgage is therefore covered at all times which is the main appeal for active investors.
  • Full transparency. Investors looking to purchase an operational HMO, after deciding the location is right for them, will look for occupancy levels and the gross rental yield of the property. A general rule of thumb will tell you that a healthy HMO yield will be upwards of 5% gross, location and condition dependant. Ask yourself, are the rental incomes per room you’re currently receiving set at market value?
  • Your HMO licence. Do you hold a fully compliant and in date licence for your HMO? It is far easier to transfer a HMO licence than it is to obtain a new one. If you are unsure or have licensing questions you can approach your local council who will be able to assist.
  • Property condition. In order to achieve a maximum sale price and attract prospective buyers it is advisable to present the property well and to ensure that any noticeable maintenance issues are on top of.
  • Keep your tenants well informed. By sustaining a positive landlord/tenant relationship you increase your likelihood of a smooth sale.
  • Choose the right agent. Agents who specialise in HMOs are more likely to understand the best way to market the property in order to attract the widest audience and sell at the highest price. HMO’s require a strategic marketing approach. Connect UK hold the largest, managed HMO portfolio in the South of England.

The first point to consider is why you’re selling. Are you looking to free up as much capital as possible? Or are you time restrained and looking to offload as quickly as possible? The valuation you receive will be dependent on these factors. When selling as a portfolio you must also consider the potential purchaser. Buying a portfolio often means a discount is received on the overall market value. We must entice investors to want to buy them altogether. 

Take into consideration the property locations and the state of repair that your properties are in. Be realistic, in yourself, about how much effort you, personally, are willing to put into the deal.

Regardless of the reason for the sale there are great benefits to selling property ‘in bulk’ over them being split and being sold individually. The average private treaty sale is 3-4months and selling the property individually means them all selling at different times. Not only this but there is likely to be numerous agents and solicitors dealing with each transaction which can be hard and quite stressful to keep on top of. Equity release will be inconsistent if the properties are sold individually. Selling as a portfolio means one transaction, one exchange date and one completion date as well as one agent.

Selling the property with tenants in-situ means the tenant(s) will still have the right to quiet enjoyment of the property during the sale. By selling to another investor the tenant(s) may remain where they are and there is no need to go through any eviction process. This often means there are no restrictions from the tenant’s side for maintenance and viewings of the property.

No eviction process means a faster sale. Evicting tenants can be a lengthy process and there is no guarantee that they will leave come eviction day. This can cause further problems both for you, as the landlord and for the sale.

proves beneficial for you and the buyer, as you’ll receive income up until the day of completion and the buyer will receive income from thereafter. The mortgage is therefore covered at all times which is the main appeal for active investors.

As we all know life as a student can look somewhat different to that of life far beyond our student years. As a student your accommodation is temporary and sometimes, as a result, can be treated in a way that reflects this. This is why it is paramount that when selling this type of accommodation, the condition is kept tip top.

Any potential purchaser will be looking for property that is ‘let ready’ for its next batch of students and therefore the property will need to look appealing and be free from any maintenance issues. 

What is the rental income you have been receiving? Is it in line with market value? If the property is being purchased with students in situ then the number of potential purchasers will increase if the let is already at market value. This eliminates any need for the new buyer to taken over and increase the rent which may risk causing upset to the current tenants.

When selling a holiday let it is very common for potential purchasers to already have an invested interest in the local area. This is a benefit to you as they will already know of the local attractions and amenities so once enquires come in you know that you’ve already ticked boxes. 

Your only hurdle now is the property presentation. Does the accommodations décor suit its surroundings? Is each room in good condition and ready for its next let? Are all maintenance issues up to date and resolved?

Potential purchasers will show a natural interest into the ‘track record’ of the business. How well has it performed over the last couple of years? Be prepared to answer questions on the rental incomes and peak/off peak periods too.

We sell & acquire for clients

 Investment Properties

 HMO's

 Vacant Commercial Buildings

 Let Commercial Buildings

 Care Homes

 Retail Property

 Offices

 Development Land

 Unconsented Sites

 Consented Sites

Benefits of selling with tenants in situ

No void periods

You receive income until the day of completion. If your property sits on the market empty for a few weeks or even longer then you are already at a financial loss. By selling with your tenants, you’ll receive rent up until the day of completion. If the date of completion is part way through the month, then the rent will be apportioned by the solicitor.

More attractive to investor purchaser

Selling with tenants in situ is more attractive to an investor purchaser. Why? There is no void period once the completion takes place so the buyer incurs no costs or time vetting potential, future tenants.

No renovation neccessary

There is less of a requirement to spruce up the property before the sale. Most potential purchasers looking for buy to let property will be more interested in the rental yield the property achieves over a well pruned garden.

Less stress for Landlords

If you choose to evict a tenant before selling you may cause them to feel insecure and vulnerable. Very often, tenants refuse to allow viewings until after they have vacated the property, and they are quite within their rights to do so. Those that do allow viewings may not keep the property clean and tidy, so it may not show well to prospective buyers. These are all headaches for a landlord and can be avoided by selling with the tenants in situ.

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