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 your husband is unwell, I would suggest that it's best to serve notice, sell the property and move. It's unfortunate that you didn't proceed last year, but sometimes things change rapidly. FWIW, I would normally say that landlords should not mess tenants around, but ill health often changes what is reasonable.

Thanks for the advice @VanCleefArpels . I will offer it to them again and hope their situation has changed enough for them to go for it. I’d never thought about how offering it at a lower rent can be a bad thing for renters long term but what you say makes a lot of sense.

@JustAnotherWhinger we’re not going to hum and haw every year. We made a mistake last year but we won’t be doing or saying anything to the tenants in future until we’re 100% sure. However, I agree with you that some people probably shouldn’t be landlords and I’m one of them.

‘You could always take out a loan/HELOC to put towards a new property.’ You’re making a pretty big assumption there @Bigcat25 . I had to give up work several years ago to care for my disabled, seriously ill DH so I couldn’t just take out a loan, nor would I want to. Yes, I feel bad for the tenants but how many people would honestly pay interest on a loan rather than liquidating an asset to enable someone else to pay below market rent for another year?

@mondaytosunday sounds like you’ve had some really awful experiences - sorry you’ve been through all that. Our current tenants have been generally been very good though they did cause a lot of stress over one issue which is part of the reason we started thinking about selling initially.

@IncessantNameChanger ‘As you can see on MN the hatred for landlords is real’ Yes, I knew I sticking my head above the parapet!

@Thundertoast and @loislovesstewie - thank you both. Yes, my husband’s situation has deteriorated a lot and I have to think about him/us first.

Thanks everyone for your opinions. I think @Hoppinggreen sums it all up really.

By the level of vitriol on MN it is what renters want. Corporate will be in for maximum profits. I'm so glad my tennants have left of their own accord so I'm not in OPs dilemma as mine is on the market to sell. If a business buys my btl the agent has told me it will get miniumim 30% more rent than I was charging. I don't even care that it was my foot on the property ladder ( live in a rental for work so a Tennant myself) I'm running for the hills. Pay off the mortage and capital gains and even if i made a loss id be delighted to get rid before May. I had lovely very long term tennants and the house was in great condition. But the rules change year on year. You never know what's going to be next and the fear that it might take years of legal to get it back if things go wrong.

Interestingly the BBC said this morning the numbers of renters is going down right now.

Plus it's turning into more of job so you need a profit and wage on top. That better suited to a business that's has tens of houses on its books.

Why not see if they want to buy it?

You are not doing anything wrong. Your reasons are valid and your own health and security come first. You gave notice, acted fairly, and circumstances changed again. That happens. Feeling guilty just means you care, not that you should keep doing something that is stressing you out. Selling sounds like the right call for you now.

I would just sell it, a renter will perhaps buy it anyway as it's FTB price.

I’d offer to sell it to them at a bit of a discount. Not to be a pushover or anything, but you’ll save on estate agent fees, and avoid viewings (which you’d have agree with them anyway), and they’d probably be unlikely to back out if they decided to go for it. Plus you know they aren’t in a chain that might fall apart etc.

I sold my rental property and put the money in Stocks and Shares. My advice would be as follows:

1. get landlords insurance that covers legal fees if your tenants don’t move out when they should (if you don’t already have it)
2. tell your renters it’s going on the market so they can decide to stay or move out prior to it going on the market
3. if they stay then offer your tenants a generous rent reduction. The conveyancing can take months and it’s better to have some rent than no rent. It also acknowledges that people coming round to photograph and view the property is an imposition
4. price your property realistically so that you get a quick sale and it minimises disruption to your tenants. I got an asking price offer in 10 days

I’m a landlord. I have a couple of properties, and was a renter. I totally understand. I have good talents. I really care about that but at the end of the day you have to put yourself in your needs first being a Landlord is not easy. I’ve looked at my income from my rental property properties all my former homes actually for one reason or another decided to rent them not sell ,
With the interest in mortgage rates, Repair bills, Gardens Roofs boilers et cetera et cetera et cetera I’m not making a penny !!
Two of my tenants earn more than I do it’s bonkers if you need to sell sell but give them plenty of notice. The rent has right act is forcing me to sell three properties where I’m quite happy with the tenants and they’re quite happy with the properties. The rents aren’t expensive and they don’t want to move but because of this act I’m out I’m a decent Landlord and it’s a shame but that that’s this government for you.

You are fortunate to have good tenants who obviously pay the rent on time and don't cause you any trouble. Coupled with the fact that you have seriously messed them around maybe you should put off your decision to sell for a while. You want them to leave before the "no fault evictions" become law but remember that's their home not just your rental property.

While it's kind of shitty that you were going to sell, changed your mind and have now changed it again, fundamentally it's your right to sell and if it's what you need to do maybe to have money to live on because your husband can't work and has care needs, then it's fine to do it and don't feel guilty.

You shouldn’t mess them around like that that’s really shitty. Make sure this is your final decision before you tell them, the rental market is even harder than a year ago to secure somewhere to be prepared they may need to stay a while!

Would you instruct a letting agent? They may be able to obtain a higher rent for you, they will act as a go-between, advise on the renters’ right bill and the whole process is a lot less stressful. I haven’t found much in the rental rights’ bill to put me off being a private LL. If you own the house outright, could you take out a mortgage it to raise some money?

Toughen up and tell them OP - you just have to accept that they are going to massively dislike you.

Our neighbours rented a 3 bed house and had done for 8 years, the landlord told them that they were going to be looking to put it up for sale in about 6 months time and they couldmove without notice. Which is a fair amount of warning.
Well, they found somewhere new and moved out within 2 weeks. It was bizzare how offended by it they were (we felt) but if they found somewhere they liked.. That was about 3 years ago and the house has only recently got a sold sign. It was on the market for about a year and a half, then some people moved in for about 4 months who knew the landlord and had bought a new build that wasn't ready yet so had temporarily moved in to sell theirs. Then it's been empty for around another year, on sale. Has sold within the last 3 months but no-one has moved in yet so presumably there is a chain.

So... I wouldn't turf them out immediately!

I’d never use an agent again, they’ve cost me £££ for issues that I could have solved myself in a simple text. E.g:
Tenant to agent: the hob is broken
Agent sends electrician who charges £250 and tells (or reminds, as this was in my instructions) that this is an induction hob and they can’t use their own non-induction cooker ware. If they had called me, I’d had asked them whether they use the cookware provided by me.
Tenant: post box lock is broken, agent sends a locksmith to change the lock, £200.
Or they could have just been told to use the correct key which was provided.

And don’t get me started on call out fees to change a light bulb which I could have happily done myself, or plumbers for blocked drains when all it needed was pouring down an unblocker and brush it (also something I happily do for my tenants).

Agents won’t care, they’ll make a quick phone call to their overpriced contractor, take their cut and send you a bill.

DO NOT DO THAT!

The trouble with renting is, generally, that to tenants it’s a means to have a home. To landlords, it’s business. And I say general because I know that there may well be people out there not making any money. Maybe even true philanthropists.

If it’s not working out for you though, you need to do what does work for you. It’s a financial decision with human fallout. But I know as a past renter that the unknown is horrible. So make a decision, stick to it, and give your tenants some certainty.

Yes you have messed them around but equally it’s your house and if you want to sell then you should. Be open with them and have the conversation upfront, gives them enough time to find somewhere.

Its your property and up to you if you want to sell.

As a token of apology for messing then about could you give them a month or two rent holiday?

Dont be silly, sell it!!!

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.

@Lunchcatastrophe I think what it shows is that you are a decent person trying to do right by your tenants.

I think you have a couple of options:

• could you get a mortgage on the property? This would release some capital for you but still let you retain some equity. It would probably need to be a BTL mortgage (not a personal one) which is slightly more expensive.
• could you sell with the tenants in place? ie you'd be looking for an investor to buy it. Look into "modern auction" - this has the advantage of being much quicker than the standard process and the auction house will attract investors rather than people buying a family home (I used Iamsold).

Either way, I think you need to put the rent up to something nearer the market value.

Stop worrying and sell up.

When I read the title i thought you may have had family living in your property which makes things slightly more difficult.

Dont listen to some of the renters perspectives on here they are warped.

You have to do what suits you and your family, Your husband is disabled and you need the money to give you a more comfortable life.

You don’t owe anyone any favours and you shouldn’t feel bad for changing your mind; that’s life.

The family who are renting will find somewhere else to live and without sounding harsh that isn’t your problem, anyone suggesting otherwise Is talking absolute nonsense and if they were in the same position as you, believe me they would suit their own needs.

Just give the family as much notice as you possibly can.

Good luck x

I’m a ll and I’d also feel very guilty if I did what you’ve done. But at the end of the day you’ve got to do what you’ve got to do.
Give them as much notice and time as you can though.

Everything you said was okay until you said you'd put them through this a year ago, when they found somewhere, and you changed your mind. Now you've changed it again.

I mean, it's tough luck on your tenants' part, but don't expect them to be happy about it. It's part and parcel of being a tenant, knowing that the rug could be pulled from under your feet at any point.

I do have to ask what repairs have wiped out all your profit, given that you don't have a mortgage on the property?

I am guessing the renters want to buy the property.

If not, well they will get what they wished for and thus deserved.

I didn’t say repairs had wiped out all my profit. I said my net profit was £329 per month over the last tax year. Work done on the roof, new shower, work done in the bathroom following an escape of water (plus putting right the damage that caused downstairs) new garden fence.

Everything you said was okay until you said you'd put them through this a year ago, when they found somewhere, and you changed your mind

Yes, that’s the point. I wouldn’t have started the thread but for that. To clarify, I didn’t just change my mind on a whim. My personal circumstances are now significantly different to what they were last year.