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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 marketed to an investor market
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.
- 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 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.
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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