Selling a tenanted 1 bed flat (AST tenancy)

by Readers Question

10:52 AM, 24th May 2017
About A year ago

Selling a tenanted 1 bed flat (AST tenancy)

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Selling a tenanted 1 bed flat (AST tenancy)

I am wanting to sell one of my properties, but it has a tenant living there who I do not wish to evict. The tenancy is a normal AST tenancy so I could serve a s21 Notice and evict him very easily, but he has lived there since July 2009 and has never caused me any problems (apart from about 3 years ago when I had to ask him to stop putting his bin bags in the communal hallway). His rent is always paid by Housing Benefit as regular as clockwork.

Does anyone have any suggestions for how I would find a buyer who also wants to keep the tenant?

The flat is currently let at £690.00 pcm on an assured shorthold tenancy (now rolled over to become a monthly periodic tenancy).

I’ve never sold a tenanted property before, so any advice on how best to do it will be gratefully received.

Robert



Comments

Frances Watts

11:57 AM, 25th May 2017
About A year ago

We recently sold a 1 bed flat which had been occupied for two years by a good tenant. We had no particular legal problems and did not have to evict the tenant as the new buyer wanted to keep the tenant on.
Good Luck

Michael M

12:53 PM, 25th May 2017
About A year ago

I've also sold a property with tenant in-situ. I contacted our local estate agents who usually have a register of landlords who are in the market to buy properties. You may have to accept a slightly lower than market price, because any landlord worth his salt would always be looking to buy below market value. My experience is that, once you have found a landlord interested in purchasing your property, the sale is usually swift and uncomplicated. All the best. Mick

Robert Mellors

21:26 PM, 25th May 2017
About A year ago

The flat is in Didcot, Oxfordshire, so I have asked a local estate agent in Didcot, that has recently sold another flat in the same development, to come and view the flat and provide me with a market valuation. However, I'm not sure whether they will have had much experience of selling a flat with a tenant already in it. I could evict the tenant, and sell with vacant possession, but I would rather not do this if it can be reasonably avoided.

Ian Clifford

12:46 PM, 27th May 2017
About A year ago

Hi

Buying and selling a BTL property with a tenant-in-situ is a regular occurrence.

I personally have bought a property with a tenant-in-situ and as long as the tenant is willing to sign a new tenancy agreement with the new landlord it won't be an issue.

A good solicitor will insist on this, both for the buyer and also the seller.

The most important thing to know is that a new tenancy needs to be in place on completion.

The other considerations are that in selling with a tenant in situ you'll be limiting your potential buyers, also if the buyer requires a BTL mortgage then not all providers support HB tenants.

Depending on your timescales, you may market the property solely to BTL buyers with a tenant-in-situ.

If you're not able to achieve a satisfactory offer, then it's down to you to decide how loyal you want to be to your tenant?

Of course one of the lovely people on this site may be interested?

Robert Mellors

15:21 PM, 27th May 2017
About A year ago

Reply to the comment left by "Ian Clifford" at "27/05/2017 - 12:46":

Hi Ian

When you bought a property with a tenant in situ, did you go to a specialist website or estate agent, or was it just advertised through a normal high street estate agent?

I've seen another flat on the same development that was advertised in February and has already sold, so I'm sure there is quite a demand for the flats (as it is a great location for commuting into Oxford, Reading, London, etc), but the demand may be from first time buyers rather than investors who are happy to carry on letting the flat, in which case I may be forced to evict my tenant. I don't know if any of the landlords on here would be interested in purchasing it, but I guess they would contact me direct for more details, or contact the estate agent once it is advertised.

Ian Clifford

17:08 PM, 27th May 2017
About A year ago

I bought through a local Agent, I think you could always list it here and in other landlord forums.

You could advertise it with all the details, price, rental income, yield etc..

Robert Mellors

17:20 PM, 27th May 2017
About A year ago

Reply to the comment left by "Ian Clifford" at "27/05/2017 - 17:08":

Hi Ian

Unfortunately I cannot list details on here as that would require the website to have an estate agency licence, but I wondered if there was a specialist agency out there somewhere that specialised in tenanted properties. I know when I've watched Houses Under the Hammer there are occasionally tenanted properties for sale at auction, but these are usually the old regulated tenancies (subject to a low "fair rent", and a very secure never ending tenancy), and this is not the case with my flat.

I guess using a local estate agent is my only option really.

Ian Clifford

20:01 PM, 27th May 2017
About A year ago

Reply to the comment left by "Robert Mellors" at "27/05/2017 - 17:20":

Hi Robert

It's true you can't list it for sale per se, but landlord events happen all over the country where likeminded people are sharing opportunities like this.

As I understand it, perhaps you could give a price and rental income with perhaps a postcode at least, if not the town at least.

For example I'm currently diversifying away from my normal market as a typical portfolio property that I normally buy are now carrying a stamp duty surcharge of £9,000.

Have you looked at Meetup? It's an app that gets likeminded folk together and there are a number of landlord groups.

For example the Baker Street Property Meet is on there!

Hope this helps!

Robert Mellors

10:41 AM, 29th May 2017
About A year ago

Reply to the comment left by "Ian Clifford" at "27/05/2017 - 20:01":

Hi Ian

It is in Didcot, OX11 8UU. I get £690 pcm rent, but I do know that others like this one are being let at £750 - £775 pcm, but I tried to keep the rent low enough to be affordable for the tenant (so I set it at around the LHA Housing Benefit rate). I've not yet had my flat valued, but I did see another one sell this year for £169k.

I am aware of Meetups, but I am too far away from the location of the flat for me to be able to start networking with investors in that area.


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