With or without tenants?

by Readers Question

4 years ago

With or without tenants?

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With or without tenants?

I have a small portfolio of 4 x modern apartments, in Leigh, Gtr Manchester. Each is 2 bed, first floor( of 3) and with balcony picturesque canal views to the rear. They have been great solid renters since purchase 2006 accruing 5.8% yield for me and with long standing tenants who wish to stay even longer. I need to sell them to release capital for a new venture.

My questions are:
1. Should I give notice to the tenants before marketing, or are there any investors looking for good reliable ‘tenanted property?
2. What is the best recommended means of marketing this portfolio? I should add that though they are desirable flats, a couple of recent distress sales have given the impression that the values have dropped – goes without saying that I need a good price in spite of this.

Any suggestions welcome

BobDoor



Comments

Neil Patterson

4 years ago

Hi Bob,

If any person or company markets or sells your property they are acting as estate agents and must have professional indemnity insurance and be member of The Property Ombudsman (TPO) otherwise they are acting illegally so please be careful.

I know many people that have involved the tenant and make it worth their while to help with viewings, but that does depend on your relationship obviously.

4 years ago

Hi Bob,

There are various things you can do.

When I sold a property recently, I incentivised the tenant with a financial reward to keep the flat tidy and co-operate with viewings.

I also served notice on the tenant, but said I was just "testing" the market and if I did not achieve a sale, they would be allowed to remain.

I would recommend that you arrange an open day and get as many people round in one day as you can to view the properties.

Bob Banner

4 years ago

Reply to the comment left by "Neil Patterson" at "30/06/2014 - 11:02":

Thanks.
At this stage I don't know what the tenants might say about me potentially giving them notice, or assisting with viewings etc. However, my guess is that they would all stay if the new purchaser wanted to carry on renting.
I'm just finding it difficult to identify possible buyers in this market and not simply trying to sell them off via the local estate agents, which would definitely mean getting rid of the tenants first. I don't want to turf out good reliable tenants if I can help it.

Bob Banner

4 years ago

Reply to the comment left by "Vanessa Warwick" at "30/06/2014 - 11:24":

Hi

Just posted the same question on prop tribe. Didn't see your moderated reply. Bob

Ian Ringrose

4 years ago

Why would an investor buy with a 5.8% yield?

Have you asked your tenants if they wished to buy?

It may well be worth contacting local reputable letting agents.......... Many of them will have investment L/Ls on their books who are actively looking to buy at the moment. The letting agent may then be in a position to introduce you to a prospective purchaser.
Make sure, though, that they are reputable and member of one of the industry bodies?

Reply to the comment left by "Ian Ringrose" at "30/06/2014 - 12:09":

In Oxford we have investors buying at under 4%....... but there has been between 15% and 30% capital growth over the last 12 months...... not sustainable you may argue, but a reality!

Bob Banner

4 years ago

Reply to the comment left by "Ian Ringrose" at "30/06/2014 - 12:09":

I thought 5.8% was well above the national average? It seems that investors are not what I am after then as an investor would want the properties for next to nothing and I can't afford to do that. Otherwise I would look at any 'cash for your property' type buyers and give them away for 60-70% of their value.

I was hoping to find someone who is looking for a solid investment, not an INVESTOR as the two don't necessarily go together. I'm quickly coming to the conclusion that I am wasting my time and should offer all flats via the local estate agents as my question about 'tenanted or not has been missed by those who only saw 5.8%

Colin Dartnell

4 years ago

Reply to the comment left by "Ian Ringrose" at "30/06/2014 - 12:09":

Hello Ian,

In my area, anything between 5 and 6% is considered pretty good, as property prices are soaring. The gain is from the capital investment at the moment. In April I bought two very good value houses at around 185k each, now they are worth close to 200k maybe more and there is nothing to buy at anything close to those prices! Most 2 beds now start at £215k - £225k with 850 per month rent, with decent 3 beds starting around £245 at £950 - £1000 a month

Colin Dartnell

4 years ago

Reply to the comment left by "Bob Banner" at "30/06/2014 - 17:22":

Hello Bob

I would find a good letting agent in your area and tell them you might be selling your flats and they will probably have landlords they act for who would be more than happy to buy at about the market price. Try and get a good selling rate from the agent as it is more than one property and should be an easy sale for them. Look on sites like Zoopla to see what the going rate is for your type of property. You shouldn't have to go much below the market price if at all as the purchaser won't have the hassle of finding tenants with the added costs that entails, and they will be getting rent from day one. No void time looking for tenants! Good luck1

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