Selling Your Tenanted Rental Property at Auction
There's been much in the property press recently about the number of private landlords who are downsizing their rental property portfolios due to the current economic, tax, and legal situations as they apply to buy-to-let landlords.
There's no denying that profit levels from buy-to-let properties are down currently when compared to recent years; the introduction of a surcharge on stamp duty for second homes and changes to mortgage interest tax relief have meant bigger portfolios are less lucrative.
However, rental income yield is still around the 3% to 8% mark and that represents a far better investment than leaving cash in the bank.
So, is it still a good time to sell a rental property? Good question!
Rental properties as an investment
Most real estate purchases, and this includes rental properties, are still a worthwhile investment, especially for the first-time landlord and those with just a handful of buy-to-let properties.
Even with the current issues relating to buy-to-let, there are still plenty of willing investors out there who are prepared to pay for the right property.
Gauging whether your property would be attractive to buyers can be hard to ascertain, so it's a good idea to ask a professional property agent or an auctioneer, as they will know the current state of the market.
Selling a rental property with tenants in situ
Some investors will like the idea of buying a tenanted rental property because it provides an instant income stream and they don't have to worry about advertising for tenants or making improvements to get tenants in.
Tenanted rental properties can be a little bit of gold dust, but if you're thinking about selling such a property, there are a number of considerations.
Five top tips to get your rental property to market
Follow our handy tips to make sure you get things right.
Contact Higgins Drysdale National Property Auctions for your free, no-obligation property appraisal.
Our Property Sale Appraisal takes around 20 to 45 minutes and can be carried out over the phone.
Within 24 hours, we will provide a detailed and precise Property Sale Appraisal document which provides best advice regarding the most appropriate method of sale, price and process to facilitate a speedy, certain and profitable sale.
The information will include details of date options, fee information and everything you need to help you make an informed decision that is best for your unique circumstances.
If you wish to go ahead, another quick call will ensure everything is in place and, once instructed, we will be able to start the process of getting your rental property to market.
Finding the right buyer
Potential buyers have a lot to think about when looking at rental properties. As skilled and knowledgeable auctioneers, we already have lots of experience in these transactions and know the best marketing techniques and timeframes to give your property the best chance of being sold at the best possible price.
Private property auctions are typically the place where investors go to get the widest choice of potential rental properties, and with the Higgins Drysdale modern method of auction, we don't have to wait to place your property into a quarterly mass auction, we can market the property and set the auction date to fit with your particular time frame.
Read our House Sale Case Study – Client on a Financial Deadline.
Required documents and procedures for handing over the tenancy
When you sell your tenanted property, there are several steps you will need to take to enable the buyer to become the new landlord of your tenants. Here are the key documents and procedures for handover:
Signed tenancy agreement: You will need to provide the buyer with a copy of the full signed tenancy agreement which must include all the tenancy terms and conditions as they currently stand for the tenants in situ.
Right to rent evidence: Landlords have a legal obligation to seek the necessary immigration evidence that tenants have the right to reside in the UK and therefore rent a property. You must be able to show proof of your checks to the new landlord.
Rental deposit: You will need to pass the tenant's rental deposit to the new landlord through a government-approved tenancy deposit scheme. How this occurs will depend on the type of let and scheme used. You will need to inform all parties of how the deposit has been transferred.
Legal notices: If any legal notices have been served, for example, in respect of rent arrears, damage caused by the tenant, or eviction notices, copies should be passed to the new landlord.
Safety Certificates: Current and valid Gas Safety Inspection Reports, Electrical Installation Condition Reports and any other applicable safety certificate should be passed to the new landlord alongside an up-to-date Energy Performance Certificate (EPC).
Repair information: If there are any ongoing or outstanding repair issues, you will need to provide full information to the new landlord.
Inventory: If the tenancy refers to a furnished property, you will need to provide a full inventory of the furniture included as part of the lease as this should form part of the sale price of the tenanted property.
Want to sell a property with tenants in situ? - It starts with a conversation
Rental properties still represent one of the most reliable long-term investments. With tenants in place, they provide a reliable source of income and the potential to build wealth because even after a period of economic instability house prices have a tendency to bounce back quickly and rise consistently.
At Higgins Drysdale, our mission is to focus on you as a seller and we are committed to putting your needs and circumstances at the forefront of our sales advice.
We are committed to providing best-advice, and this means we will always advise you of the most appropriate marketing and selling methods for your property. It's what suits you, not what suits us that's important in our property auction model.
To auction a tenanted house or flat, or any type of property, with Higgins Drysdale, contact us today – we're happy to chat. Or dive straight in and book your no-obligation property sale appraisal through our online booking system.