Are you considering selling your tenanted property? We discuss the current options for investors looking to sell their buy to let property with sitting tenants in place including traditional high street estate agents, auction houses and quick buy, cash purchase providers.
Mark Burns | 20th October 2021
One of the biggest challenges facing any property investor is the exit strategy, especially when the property they're selling has sitting tenants. As any experienced property investor will know, selling a property is a longer process, often taking up to 6 months when the conveyance process is included. With 1 in 4 property sales falling through, this can take even longer in certain circumstances. So how do you sell your property with tenants in situ, when you still have your buy to let mortgage to pay each month? It's this dilemma which many property investors struggle with on a daily basis throughout the UK.
Before we look at how we sell a tenanted property for our investors, it's worth taking some time to look at the options which have previously been available to buy to let property investors, and assess their pro's and con's.
Traditionally, an investor who's asking themselves "How can I sell my tenanted property?" would find themselves considering the following options:
1) Use a traditional local estate agents
2) Put the property up for auction
3) 'Quick Sale, cash purchase' property company
Let's look at these options in more detail....
Use A Traditional Estate Agent To Sell Your Tenanted Property
Without doubt, the use of traditional estate agents to sell a property with tenants in situ has been the most popular option amongst property investors. With traditional estate agents being responsible for selling the majority of properties throughout the UK, it's understandable that they have been the first call for investors looking to their buy to let. However, traditional estate agents work along tried and trusted methods, which includes vacant possession at its core. As such, many investors seeking to sell their tenanted property have been advised by the agent to ensure the property will be sold with vacant possession when it is sold. The result of this is a protracted void period at the end of the tenancy when the landlords are not only paying their buy to let mortgage, but also become liable for additional costs such as energy bills and council tax. If the property sale takes a longer period (this year for example), or the property sale falls through, this process can become incredibly expensive for the landlord, often resulting in large losses in revenue over the period.
It's also worth considering the audience that the traditional estate agent will be able to offer you. The vast majority will market your property across the major property portals, and undoubtedly this is a good starting point. The sheer numbers involved ensure a good number of enquiries, however the vast majority of these will come from end users looking to live in the property as soon as possible. The majority of calls we have from investors looking to sell their tenanted property is from people who have already tried the traditional estate agents, and have ultimate withdrawn through a lack of progress.
With many property investors being exceptionally busy, either in their day to day jobs or focusing on the rest of their portfolio, property auctions have been another option for people looking to sell their tenanted property. With a focus on ease and convenience for the selling party, the compromise is normally in the price achieved which often falls significantly below market value. With significant fees (often up to £6,000) being placed on the buying party by the auction company, the actual price acheived for the property often falls far below market value.
Quick Sale, Cash Purchase Property Companies
As with auction houses, the key appeal of the quick sale, cash purchase property companies derives from the speed and convenience on offer to the vendor. After all, much of the marketing of the quick sale companies focuses on cash purchases going through conveyance in a short space of time. Understandably this will appeal to the busy investors who are looking for a fast and convenient exit strategy from their investment. However, a deeper dive into the business model of these companies clearly shows an appetite for a higher margin, often significantly below the real market value of the property. Often sales of this kind result in considerable losses, especially when compared with the focus on higher returns throughout the duration of the ownership and rental.
As we mentioned earlier, every day we're contacted by investors looking to sell their tenanted property, many of them have already tried the more traditional methods above with little or no success. They're keen to maximise their rental returns, but often feel somewhat challenged by the traditional methods of exit, all of which suggest fairly significant losses in revenue. It is for this reason that our business decided to offer a more detailed and comprehensive service for investors looking to sell their tenanted property. After all, we deal with the buyers every day, with over 20,000 property overseas on our database, and hundreds others visiting our website every day. Our clients are actively looking to purchase tenanted properties, as it saves them money, especially when compared to the more traditional estate agency model.
Our service for investors looking to sell their buy to let properties with tenants in situ focuses around a more cohesive approach, working openly and honestly with tenants and lettings agents alike. The focus of our marketing is around our database of active property investors who actually want to purchase properties with a good tenant in place. After all, it saves the new landlord time and money sourcing a new tenant, and ensures revenue generation from day one of ownership.
If you're currently asking yourself "How can I sell my tenanted property?" why not give our team a call today on Tel: 0161 337 3891, or email us on firstname.lastname@example.org. We look forward to hearing from you!