Want to sell rental property but feel guilty

[Lunchcatastrophe]

We bought our rental property nine years ago. It cost £160,000 and we bought it outright. The current market appraisal suggests a marketing price of £215,000 to £220,000. I suspect it would probably sell for not much more than £200,000.

I want to sell due to a combination of the factors. I’m worried about changes to the Renter’s Rights Act. I think we’ve come to the point where the lump sum from the sale is going to be more useful to us than a few hundred pounds in rent a month. After expenses and tax we made £329pcm in the last tax year, due to paying for some quite expensive repairs. I don’t enjoy being a landlord and the last couple of years have been particularly stressful. I worry a lot about a major bill wiping out an entire year’s income or more. My disabled husband has become increasingly unwell and I think being rid of the worry of the property and having some extra money to spend on moving to a more suitable property ourselves needs to be prioritised.

The current tenancy ends in June and I want to give notice before the law changes in May (we’d have to serve notice by April anyway). However, I feel really guilty as a year ago I decided to sell and gave the tenants advance warning. They managed to secure a house that was becoming available a couple of months after their tenancy was due to end as, luckily, one of their neighbours was moving later that year. We agreed they could stay in the house until their new one was ready. I then changed my mind about selling having been persuaded, somewhat reluctantly, that selling wasn’t the right thing to do. I let the tenants know, apologised for messing them around and said of course I’d understand if they wanted to take the new house anyway. They had a think about it and came back to me and said they’d rather stay. They asked if I’d be increasing the rent for the following year and I said I wouldn’t.

Now, a year on, I really do want to sell for all the reasons I outlined above but I feel very guilty about messing the tenants around and them losing the chance of taking the alternative house just across the road.

DH says we need to toughen up a bit and put our own needs first.

This has turned out sounding a bit more like AIBU then an investment thread but I suppose I’m looking for opinions from other LLs about what they might do in a similar situation. I suspect the fact I’m hesitating due to feeling guilty shows I’m not cut out to be a LL.

As a former renter, I do feel you messed them around - you should be sure before you tell someone they're going to lose their home! But these things happen, and it's a business to you at the end the of the day.

TBH, the tenants may already know this is coming. The fact you'd already wanted to sell once, and all the well publicised news about private landlords selling up, means they should have predicted this. It may be they preferred to stay, with no rent rise, a landlord they know, a house they know and no hassle of moving. Even if it only ended up being for another year.

Give them as much notice as possible. Would they be in a position to buy off you? That would save you estate agent fees etc and would be a nice outcome for the tenants, as they obviously like living there.

Thanks for your reply @Carrotsandgrapes . I did ask them last year if they had any interest in buying and she told me they weren’t in a position to buy anything unfortunately. I do think they probably weighed up staying or moving on and the decision was probably based on the rent. I think it was already priced quite low even without the rent freeze for the year. I notice there’s an identical house (as in same style, same layout and room sizes) but admittedly with a better kitchen currently for rent in the same street and it’s over 30% more.

I actually feel like I did them a disservice by freezing the rent. If I’d said it was going up it probably would have encouraged them move last year. That said I suppose there’s no guarantee the other landlord wouldn’t have served notice a year later anyway.

I’m going to have to steel myself to talk to them.

What I keep reading on here is that renters are over the moon that landlords are sellingup so they should be pleased

They might be in a different position now to buy anyway, thats also what I keep reading, that all these renters are going to buy once the landlords sell.

I’d let them know your intentions now so they have maximum time to find somewhere else. You could also offer it to them at a good price as they could suit you both.

'I actually feel like I did them a disservice by freezing the rent. If I’d said it was going up it probably would have encouraged them move last year' - I'm sorry but the way that landlords try to justify this stuff is incredible

Sorry @doglover90 I’m not sure I understand your comment. What do you think I’m trying to justify? I’m just acknowledging that the rent freeze probably swayed them towards staying and ultimately that probably wasn’t in their best interest.

Honestly I would wait another year or so considering what you did to them earlier. You could always take out a loan/HELOC to put towards a new property. Another option is to give them a few grand for the hassle and moving costs if you don't want to wait.

As you can see on MN the hatred for landlords is real. Why wouldn't you want to be out of it? A corporate will probably buy it to rent out in a more business minded model. Rent expectations from a lender is what? 125%? Are you getting that? That's the finance side desision

As a LL I understand you wanting to sell, but doing it so soon after messing them about last year is really shitty.

And is actually why (despite being a small LL with 2 properties) I do question if people should be allowed to be amateur LL's.

It's a terrible way to treat people.

That said if you're going to hum and haw every year you should definitely sell - that level of uncertainty is unfair to inflict on tenants.

Yep, a corporate company will buy it and put the rent up and wont be flexible and approachable like OP

Still, its what renters wanted so they will be happy.

Not putting rents up can make tenants very vulnerable when the current arrangement comes to an end as they have been shielded from the realities of the local rental market - they will find they can’t afford a similar rental. This either means they dig their heels in and force the landlord into expensive legal action to remove them, or puts them in the hands of the local authority housing department at the cost of local taxpayers. Neither is optimal.

Offer again to your tenants OP, but if you want to sell, just go ahead. I agree that returns are not great (you’ re lucky you have some capital growth - of course taxable - I will have made losses on my portfolio by the time I sell). Give more than the required Notice but also serve the relevant Notice formally when the time comes to cover all bases.

Why would a renter be happy to be screwed over? They are an individual not a monolith. Sounds like they've been fine tenants.

I think this is just a natural consequence of vilifying private landlords. It’s not a good time for landlords and tenants will expect this. But I keep hearing that the world would be a better one without private landlords so maybe it’s for the best and your tenants will finally be able to buy their dream home.

Get rid of it ASAP, OP. It’s not for you to feel guilty; is the consequence of the renters bill. They don’t want LL’s.

The people who pushed it through must have plans in place for all the people who will be forced out…

You changing your mind swayed them to stay and now you've changed it again a year later. It's crappy of you. I don't care if being a landlord is your business, you're messing people around.

Why are you wanting to sell before the renters rights act? Landlords can still get their properties back for valid reasons, selling the property is one of them.

🙄
No need for the self flagellation fgs. It sounds like you want to be absolved of your guilt. Just get over it and get the ball rolling. This is what you signed up for in being a landlord. Just own it and get on with it.

I do understand what people are saying about the OP having messed them around but can we have a bit of empathy here as OPs husband is unwell - its not ideal, but then neither is renting and being at the mercy of a landlord to begin with. How long do people suggest she hangs on to the property before giving notice then?

I have no idea why renters and people who say they support renters hate and vilify private small landlords but they do.

Im baffled by it but it appears to be what people want so the tenants will no doubt be happy and as others have said, those that pushed all this through and want the end of private landlords will have solutions and plans for those made homeless Im sure.

Jeez I’m surprised (though guess I shouldn’t be) at the responses here. I’m a landlord and I’ve been messed around by a few tenants (giving notice, then changing their minds after I found new tenants, then begging me to let them stay, which I did, then giving notice again a few months later; not paying rent; not paying rent; trashing the place and leaving all the windows and balcony doors open when they vacated during a rain storm - these were one of the people that stopped paying rent after the first month so it wasn’t anything I did to piss them off; tenants asking if I could give their deposit back to them so they could use it to secure their next rental which I stupidly did as I thought they were nice and had been good tenants up til then, only for them to leave all sorts of rubbish and their unwanted furniture behind…
So sure it’s unfortunate but it’s been a year and anything can happen in a year! They could just as easily given notice themselves at any point. And here people are suggesting waiting a year? Getting a loan? Offering them money? What?!

One thing you could do is hand over to a management company/letting agent. This way it’s less personal and they will handle any rent increases. You can still sell when you wish but they will give the notice and you can withdraw a bit.

That's very frustrating that happened to you. Obviously your terrible tenants, and op's tenants are not the same people. You seem to be implying it's ok to treat all tenants poorly bc if your bad experience.

OP isnt treating her tenants badly though.

I’m trying to sell my BTL’s. Yes under RRA you can serve Notice (4 months) if you want to sell. However you cannot then re-rent the property for 12 months. So if like me you live in an area where the sales market is terrible you cannot now as a landlord test the market and theN Resort to letting again if it doesn’t work. This is a huge deal for landlords and also prevents empty properties from being lived in. The whole thing is so badly thought through.

Toughen up OP, by dithering around you have made things worse.
You need to give notice asap and make sure you are sticking to the contract
You are not alone, having a Rental is no longer financially worth it for anyone with just 1 or 2 properties so do it quickly, efficiently and no more messing around.