Selling Tenanted Property and Leaving the Private Rented Sector
A significant period of political uncertainty, along with changes in landlord’s taxation and legislation, has contributed to landlords selling and exiting the Private Rented Sector.
However, that reduction can’t all be attributed to political and taxation changes, many landlords decide to sell to release equity.
When an agent is met with a landlord who wishes to sell, evicting the current tenants may not always be the best course of action – what should a good agent do to advise buyers and sellers of tenanted property?
Option 1: Evict the tenants and sell
This option involves terminating the tenancy by serving notice on the tenants, then getting access to the property and making any repairs or improvements to prepare the property for selling. The home report is then carried out ahead of putting the property on the market. By the time offers start to come in, a seller might be waiting up to six months without an income from that property.
Option 2: Selling the property with sitting tenants
This option allows the landlord to avoid hassle and expenditure and maintains the rental income right until the sale is completed.
Benefits of buying a tenanted property
Buying a tenanted property can be the ideal solution for anyone looking to invest. Benefits include:
- Instant rental income – receive rent on day one of ownership
- A fully furnished, fully compliant and ready-to-go property
- A smooth, hassle-free process
- Know the rental price before they purchase
- Little or no capital expenditure
Benefits of selling a tenanted property
By selling a property with sitting tenants can eliminate the risks associated with selling a property, sellers can take advantage of benefits such as:
- Maintaining the rental income right up until completion
- A simpler, speedier process that’s hassle-free
- No void utility costs
- Sell the property as is
- No need to evict the tenants from their home
What happens to the tenancy agreement?
If the tenants stay on, the tenancy agreement simply changes hands to the new landlord, who is, in effect, ‘standing in the shoes of the previous landlord’ – and is bound by the tenancy in the same way that they were.
The tenants still retain their legal rights and cannot be forced out of their homes by the new landlord, and in most cases, they wouldn’t want to.
Property Professional magazine
In the January/February issue of Property Professional, Ross MacDonald, co-founder of Portolio and NAEA Propertymark member who specialises in selling tenanted property and portfolios across Scotland takes a deeper look at why it’s important that NAEA Propertymark agents advise their clients of all the selling options.
NAEA Propertymark members receive a copy of Property Professional, which is published six times a year. Non-members can subscribe or join to receive this and many other benefits, as well as having the credibility of being part of a respected association, showing consumers your professionalism.
Kindly shared by NAEA Propertymark