Which properties should you sell first? A landlord case study

When the financial implications are broadly similar, I am selling the ones that have the least desirable tenants first.

Reply to the comment left by Cider Drinker at 25/11/2025 – 17:15
That is a very common approach and it can make sense when the financial impact is similar. Tenant profile is an important factor because some properties create more work and uncertainty than others. It is still worth checking the numbers in detail before deciding.

Several landlords discover that the properties with the least desirable tenants are not always the ones that release the most capital or deliver the lowest tax bill. They can also be the units with the strongest long term performance once the tenancy changes.

A quick review of valuation, debt, tax exposure and maintenance history often reveals a different sequence of disposals to the one that feels obvious at first. Selling based on tenant experience can work well if the figures support it. The key is to ensure that the commercial reality aligns with the day to day pressure.

13 sold, 5 to go. Plan fo selling is easy, the 5 remaining tenants have been in my properties for years (one over 20 years). When they leave or die I will sell.

I have other sources of income so to keep my tax low I don’t charge market rent and spend the rent I get on improving and repairing the properties- hence little tax to pay .. Basically holding the properties for capital appreciation which possibly my kids will inherit if I havent sold them frst

Reply to the comment left by GlanACC at 26/11/2025 – 07:29
Long standing tenants can be a real asset. A reliable household that looks after the property, pays on time and stays for many years often creates a level of stability that is difficult to replicate at full market rent. Many landlords choose to accept a lower yield in return for lower friction, and there is nothing wrong with that when the arrangement continues to work on both sides.

There is still merit in checking how the figures look over time. Below market rent can gradually create a performance gap that is difficult to see in the moment. Maintenance costs tend to rise as properties age. A large gap between the rent received and the market level can store up issues that only become visible when a major repair is required or when the tenant eventually moves on. A periodic review helps ensure that the balance remains commercially sound.

There is another point that is easy to overlook. Decisions made today can have long term consequences for the people who inherit the properties. A rental that has been held for decades on a low income can appear simple to manage during your own ownership. The same property can feel very different to your children or other beneficiaries if they inherit a portfolio that requires immediate rent corrections, refurbishment or refinancing. The emotional connection you have with long term tenants may not transfer to the next generation. Their circumstances, tax position and management capacity may be entirely different.

A gentle adjustment to keep the property aligned with local rent levels can protect its future value and make life easier for your loved ones when the time comes. It also helps ensure that the asset continues to support your financial aims while remaining fair to tenants who have treated the property with respect.

Your comment highlights an approach that many thoughtful landlords take. The key is to ensure that the arrangement still works for you today and also works for the people who may one day step into your shoes.

Reply to the comment left by Mark Alexander – Founder of Property118 at 26/11/2025 – 08:11
Agreed, I do still increase rents periodically and can cover easily major issues such as a new boiler.

My wife and kids have already said that when I croak it they will turf the tenants out and sell !!

Reply to the comment left by GlanACC at 26/11/2025 – 08:27
It sounds as though your approach works well for you at the moment. Periodic rent reviews and the ability to absorb major repairs go a long way toward keeping long standing tenancies stable. Many landlords would say that a reliable household is worth far more than the last few pounds of market rent.

There is still a practical point to consider in light of what you mentioned about your wife and kids. Their instinct to sell may be entirely reasonable from their point of view. They will not have the history with those tenants or the day to day familiarity that you have built over many years. They will also look at the portfolio through a very different lens, shaped by their own tax position, their own plans and the level of involvement they are willing to take on.

A planned transition can make an enormous difference. If the portfolio is likely to be sold shortly after they inherit it, it can help to think through which properties might require upgrades, rent corrections or debt adjustments before that point. A structured plan often protects both the tenants and the future owners by avoiding rushed decisions at a difficult time.

There is also an option that some landlords consider in similar circumstances. Selling to another landlord can allow the tenants to remain in place and preserve the goodwill you have built. It can also simplify the transition for your loved ones by reducing the number of decisions they will need to make at a difficult moment. Alternative investment options may replace the income in a way that is easier for your family to manage.

Your comment highlights something many families face. The portfolio can be straightforward to manage during your own ownership. It can feel very different for the next generation if the groundwork is not prepared in advance. A bit of planning now can save them from making decisions under pressure later.

Reply to the comment left by GlanACC at 26/11/2025 – 08:27
PS – you’ve inspired me to write an article about this. Keep an eye on our Newsletters because it should appear later this week or early next.

The Headline I have in mind at the moment (it may change) is “Should You Sell With Tenants in Place? A Practical Strategy Many Landlords Overlook”

Im struggling to work out a low capital gains if he brought the ltv from 72 to 40 per cent
He must have bought them later ,with a low loan to value and more of his cash?

Reply to the comment left by RODNEY CRABB at 26/11/2025 – 09:50
It is a good question and it highlights something that is often overlooked. The reduction in loan to value did not come from low Capital Gains Tax or unusually high equity in the properties that were sold. The change came from the size of the net proceeds that were used to repay debt across the rest of the portfolio.

Two of his properties had relatively modest gains compared with the others. They also had no early repayment charges and lower frictional costs. This meant that the net cash released after tax and redemption costs was proportionately high. Applying those proceeds to reduce borrowing on the remaining ten properties is what brought the overall loan to value down from 72 percent to around 40 percent.

You will appreciate that for confidentiality reasons, and due to the volume of calculations involved, I cannot set out the full mechanics behind any individual client’s numbers. The key point is that the improvement came from how the proceeds were used rather than from unusually low gains. A disposal does not need a large gain in order to release meaningful capital, provided the outstanding mortgage on that specific unit is relatively low in relation to its value.

Several landlords find that a couple of well chosen sales can have a much greater impact on their risk position than selling three or four properties that carry heavier tax or friction. This is why modelling each unit individually is so important.

Reply to the comment left by Mark Alexander – Founder of Property118 at 25/11/2025 – 18:42
How do you value a landlord’s health, when they are faced with long term problems with feckless tenants?