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Selling an investment property with tenants. Sat, 07 Dec 2013 22:25

Selling a house with tenants has a number of different challenges.

A landlord friend of mine recently contacted me with her tale of woe, when trying to sell an investment property with tenants in situ. 

She had decided to sell her rental property, but, as soon as she notified the tenants, they handed in their notice!

The landlord tried to incentivise the tenants financially to stay until the property was sold, but they refused and left a month later.

While they were working out their notice, the tenants refused to allow viewings, as is their right (unless stated otherwise in the tenancy agreement).

This meant that the property became empty, the Council Tax became due for the landlord, and viewings were only just possible.

The property has now been empty for two months with only one viewing.

As we approach Christmas - with only a few working weeks remaining - it's becoming increasingly unlikely that the property will sell this side of the festivities.

Meanwhile, the landlord continues to all of the outgoings on her empty property including; mortgage payments, the council tax, service charge, utility bills, and maintenance/upkeep fees.

However, selling with tenants in a property does not have to be like this if you understand that a property with tenants will invariably sell to another investor who will add it to their property portfolio, providing that it's being offered at the correct price to reflect the risk and situation.

Tenants in a property limit the sale potential as most lenders require vacant possession of a property in order to lend on it.

Those lenders that do allow the purchase of a tenanted property will be looking for evidence of a strong payment history. They will also need to see that the tenants are paying close to market rent, and that the tenancy is no more than 12 months.

Any late payments or rental arrears will further reduce the chances of getting lending on such a property.

Being unable to get lending will significantly cut down the number of possible buyers for a tenanted property.  

So a landlord selling a tenanted property has to weigh up the pros and cons of "spooking" the tenants and having them hand in their notice, resulting in an empty property ... or selling the property to a cash buyer who will simply take over the tenancy.

The first option is fraught with stress and hassle, with no guarantee that the property will sell at a market price.  Meanwhile, the property is left empty and the landlord is paying the mortgage, along with all of the additional costs mentioned earlier.

There are also estate agents fees of around 2% plus VAT to consider if a sale does arise, plus your solicitors fees, and any additional expenditure - including utility bills, service charge and council tax for all of the days that the property is vacant.

The second cash sale option is straight forward, fast, hassle-free, and there are no estate agents fees to reduce the net sale proceeds.

Dream House Buyer buy properties with all kinds of tenants in situ, and will buy any property regardless of the type of tenancy. 

We can make a cash offer for your tenanted property so that you do not experience any void while waiting for the property to sell. Your tenants can remain in situ, and we will simply take over the tenancy.

We buy properties with tenants on a AST (default tenancy), sitting tenants, tenants with no tenancy agreement, life tenants, tenants in arrears, and unknown, or informal rental agreements. 

Our service is fast and reliable ... no viewings, no delays, no hassle, no unhappy tenants ... just a valuable cash lump sum in your bank as fast as you request.

Richard Hill, Founder of Dream House Buyer, often comes across landlords who have empty rental properties on the market:

"Many landlords will not consider a cash sale because they think they will have to give too much of a discount.

It's true to say that we typically require a 15% discount to buy a tenanted property, although you benefit from a guaranteed option to selling your property for cash, and you can move on with other things in your life such as: buying a dream home, investing in a new car perhaps, or just wanting to raise some capital in order to improve your financial position.

However if you take into account mortgage payments while the property is waiting to sell, council tax payments, service charge, utility bills, estate agents fees, and legal costs, this can start to add up to a significant amount of money!

A cash sale to us means no voids, no council tax payments, no estate agent fees, and no legal fees, as we pay the seller's legal costs on completion of the sale to us.

When you do the maths and also apply a value to the stress and hassle endured trying to sell a property the traditional way, a cash sale starts to look increasingly attractive and also make sense financially.

Call us today when thinking of selling a property with a sitting tenant, and we will make you an immediate cash offer for your property. It's fast, easy, and you can have the cash in your bank as soon you request". 

Dream House Buyer is a family owned property buying company that considers all types of property, and we buy property with sitting tenants too, regardless of how long they have been your tenants.  We will make an instant cash offer for any property in the UK, regardless of the size, location, condition or value.

We will buy any property that you might consider a problem - including property with sitting tenants, flats with short leases, problem tenants, unmortgageable and structurally damaged property.  We also buy ground rents and portfolios. If you think we can help, then please invite us to make you an immediate cash offer for your property.

Contact us on 0800 1577 497 or email us info@dreamhousebuyer.co.uk


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