Selling flat with tenant in situ

curiousintrigue · 2023-11-11T08:46:32+00:00

Please can I ask you clever people for some advice on selling a buy to let with tenant in situ? He’s been in there 4 years now I think - we desperately need to sell for various reasons. Spoke to lettings agent who manage the property and take 10% - they were very negative and said we needed to make sure we didn’t upset the tenant in case he refused to leave. So how do people ever sell if they have a tenant? Although we have had this property for 17 years we have never had a problem with the agents so I don’t understand why they aren’t being a bit more helpful. can I have your experiences of selling a BTL with tenant in situ? We can’t afford to cover the rent if he leaves and then it takes ages to sell - the mortgage has increased from £200 to £900 and we are making a loss every month. Thank you for any advice.

SheilaFentiman · 11/11/2023 08:49

Sadly I think it is really hard to sell with a tenant in situ - buy to let is declining, in part through general mortgage rates and in part through increased landlord requirements like energy efficiency standards coming in. Even if a landlord is looking, they would probably prefer to buy empty and find their own tenant with their own credit checks etc at current market rent.

TheGreyRockess · 11/11/2023 08:49

Would the tenant buy the flat from you?

ProvisionsOnTheDock · 11/11/2023 08:49

You need to follow the legal process to evict him. No-one sensible will want to buy a property with a sitting tenant.

fruitbrewhaha · 11/11/2023 08:50

Can you raise the rent so you’re not covering the shortfall? Is the rent he is paying in line with local rates?

What’s the market like where in the area? If you’re selling the flat with the tenant in place but it’s making a loss it doesn’t make it very attractive.

PuttingDownRoots · 11/11/2023 08:52

Can you change the mortgage to Interest Only while you are selling?

Your best bet unfortunately is to give your tenant notice now. They don't have to allow access for viewings, evaluations etc.

ImaginaryCat · 11/11/2023 09:00

I'm in a similar position and sadly everything others have said is correct. I have tenants in mine, I've told them that within the next 12-18 months I'm going to need to sell, I've given them first refusal. I suspect they're not in a position to get a mortgage but I'm at least giving them enough time to explore all avenues.

Then I know it's going to be hard for them to find somewhere else to rent. I'm also prepared to take the hit of not having rent coming in while I try to sell if they move out before. It's a really shitty situation for renters. There's so little housing stock out there.

Original poster

curiousintrigue · 11/11/2023 13:57

Thank you all for taking the time to reply - it’s really appreciated.

we can’t really raise the rent - it’s only just gone up. It’s already interest only. It’s in Kent in an area on the river that was meant to be regenerated but never happened unfortunately. I know one sold recently with a tenant in situ so it is a possibility I guess. My worry is we give the tenant notice and then we can’t sell it. We can’t afford to pay that on top of our own mortgage.

So I’m guessing the best way is to wait for the tenancy to end and pay the rent ourselves until we can sell it.

OP posts:

PastorCarrBonarra · 11/11/2023 16:55

Speak to the tenant. He may be able to buy it. If not, he may be willing to facilitate viewings during his notice period in return for reduced rent.

messybutfun · 11/11/2023 17:14

With a tenant in situ you can only sell to landlords. Currently buying is only viable for landlords who don’t need a mortgage or only a small mortgage. Therefore your target market is very limited to cash buyer landlords.

Lina15 · 12/11/2023 09:10

my my firealarms don’t work in my rented property and are out of date. and i’m worried.
my landlords electrician can’t get out untill 2 weeks time and she’s refusing to hire someone as soon as possible what can i do? is this a risk or do i have to wait. or can i find someone myslef to do it as soon as. i live in a block of flats and this is not only a hazard to me but also my neihbors.
thanks,
again.

Lina15 · 12/11/2023 09:11

my my firealarms don’t work in my rented property and are out of date. and i’m worried.
my landlords electrician can’t get out untill 2 weeks time and she’s refusing to hire someone else’s who is available as soon as possible what can i do? is this a risk or do i have to wait. or can i find someone myslef to do it as soon as. i live in a block of flats and this is not only a hazard to me but also my neihbors.
thanks,
again

Bobtheamazinggingerdog · 12/11/2023 09:12

curiousintrigue · 11/11/2023 13:57

Thank you all for taking the time to reply - it’s really appreciated.

we can’t really raise the rent - it’s only just gone up. It’s already interest only. It’s in Kent in an area on the river that was meant to be regenerated but never happened unfortunately. I know one sold recently with a tenant in situ so it is a possibility I guess. My worry is we give the tenant notice and then we can’t sell it. We can’t afford to pay that on top of our own mortgage.

So I’m guessing the best way is to wait for the tenancy to end and pay the rent ourselves until we can sell it.

If he's been there 4 years there is no end to the tenancy...! It must be a periodic which seemingly he's not planning on ending himself.

Bobtheamazinggingerdog · 12/11/2023 09:12

Lina15 · 12/11/2023 09:11

my my firealarms don’t work in my rented property and are out of date. and i’m worried.
my landlords electrician can’t get out untill 2 weeks time and she’s refusing to hire someone else’s who is available as soon as possible what can i do? is this a risk or do i have to wait. or can i find someone myslef to do it as soon as. i live in a block of flats and this is not only a hazard to me but also my neihbors.
thanks,
again

You need to start a new thread

Lina15 · 12/11/2023 09:32

how do i do that lol

Twiglets1 · 13/11/2023 06:57

@curiousintrigue it is possible to sell with a tenant still living there but they will need to move out before Exchange of contracts. It’s quite common in some areas like London where my daughter bought in 22 - loads of the flats we viewed had tenants in them including the one she bought. But I don’t know how common it is in Kent.

Your need to speak to your tenant and tell them you want to sell the property. They may or may not agree to viewings while they are still living there and don’t have to, legally. However they may agree to it if you have a good relationship with them. It’s possible they will be interested in buying it themselves if they can afford to.

If your tenant won’t agree to viewings then I guess you will need to start the process of evicting them.

TeenagersAngst · 13/11/2023 07:03

curiousintrigue · 11/11/2023 13:57

Thank you all for taking the time to reply - it’s really appreciated.

we can’t really raise the rent - it’s only just gone up. It’s already interest only. It’s in Kent in an area on the river that was meant to be regenerated but never happened unfortunately. I know one sold recently with a tenant in situ so it is a possibility I guess. My worry is we give the tenant notice and then we can’t sell it. We can’t afford to pay that on top of our own mortgage.

So I’m guessing the best way is to wait for the tenancy to end and pay the rent ourselves until we can sell it.

Only a tenant or a court can legally end a tenancy so what do you mean by 'wait for the tenancy to end'?

If you mean a fixed term contract expiring, this is not the same thing as a tenancy ending and the tenant does not have to move out or sign a new contract at that point. The tenancy just becomes a periodic tenancy which rolls on from month to month. You still have to evict the tenant via the legal route. If he decides to leave voluntarily, we'll then happy days.

FWIW, I bought a house with a tenant in situ and there were no problems, nor did I buy below market value. However, that was before the current shitshow with interest rates and LLs being treated like the scourge of society so you may well find fewer LLs interested right now.

TeenagersAngst · 13/11/2023 07:04

Twiglets1 · 13/11/2023 06:57

@curiousintrigue it is possible to sell with a tenant still living there but they will need to move out before Exchange of contracts. It’s quite common in some areas like London where my daughter bought in 22 - loads of the flats we viewed had tenants in them including the one she bought. But I don’t know how common it is in Kent.

Your need to speak to your tenant and tell them you want to sell the property. They may or may not agree to viewings while they are still living there and don’t have to, legally. However they may agree to it if you have a good relationship with them. It’s possible they will be interested in buying it themselves if they can afford to.

If your tenant won’t agree to viewings then I guess you will need to start the process of evicting them.

They don't need to move out if another LL is buying.

ALittleTeawithmilk · 13/11/2023 07:09

Lina15 · 12/11/2023 09:32

how do i do that lol

These are directions if using a phone:

Go to the Talk>active page, and opposite that there’s a down arrow.
Click on that and a ‘drop down’ appears.
At the top of that drop-down you will see ‘start a new thread’ click on that.

i don’t know if it is different on a lap top etc..

Twiglets1 · 13/11/2023 07:23

To add to the above @curiousintrigue if you intend to sell without vacant possession where the tenants stay there even after Exchange of Contracts, you can only sell to landlords who are cash buyers with no mortgage needed

This will severely limit the pool of potential buyers and you can normally get a better price if you sell with vacant possession.

Bobtheamazinggingerdog · 13/11/2023 08:01

TeenagersAngst · 13/11/2023 07:03

Only a tenant or a court can legally end a tenancy so what do you mean by 'wait for the tenancy to end'?

If you mean a fixed term contract expiring, this is not the same thing as a tenancy ending and the tenant does not have to move out or sign a new contract at that point. The tenancy just becomes a periodic tenancy which rolls on from month to month. You still have to evict the tenant via the legal route. If he decides to leave voluntarily, we'll then happy days.

FWIW, I bought a house with a tenant in situ and there were no problems, nor did I buy below market value. However, that was before the current shitshow with interest rates and LLs being treated like the scourge of society so you may well find fewer LLs interested right now.

Show quote history

He's been there 4 years, so he can't be in a fixed term any more. Sadly that comment indicates that the OP is not a knowledgeable landlord and will find herself in hot water if she doesn't do some research.

TeenagersAngst · 13/11/2023 10:49

@Bobtheamazinggingerdog he may have signed a new fixed term contract at some point during the four years. Some LLs think they have to set up a new contract each time one expires. Indeed, some letting agents recommend this (more fees for them from LLs).

ohtowinthelottery · 13/11/2023 11:08

I've seen properties for sale with sitting tenants but they are advertised as such and are much cheaper than similar properties with vacant possession.
A friend of mine bought a buy to let with a long term tenant in it. The tenant didn't want to move and also didn't want the property upgraded as they knew that would lead to increased rent, so DF bought it and kept it as is (it is compliant). The arrangement suited both parties.

ohtowinthelottery · 13/11/2023 11:09

Forgot to add that DF was a cash buyer so no mortgage company involved.

Bobtheamazinggingerdog · 13/11/2023 11:18

TeenagersAngst · 13/11/2023 10:49

@Bobtheamazinggingerdog he may have signed a new fixed term contract at some point during the four years. Some LLs think they have to set up a new contract each time one expires. Indeed, some letting agents recommend this (more fees for them from LLs).

Possible. But she doesn't know that a tenancy doesn't end automatically, so my point stands.

Flashy9 · 13/11/2023 15:00

Hi, I had a similar problem. I advertised for sale with the tenant in situ, and received a BTL buyer who was then unable to raise a mortgage due to interest rates going up. I then resold to another investor but who wanted to renovate the property (it was configured as 2 bed but could easily be 3 bed) and re-market as a 3 bed.

My agents served a S21 but the tenants didn't want to leave, so ended up taking to court for eviction 5 months later. As an investor bought they were prepared to wait for the property. Make sure all your paperwork is up to standard and good luck. I would advertise with a tenant and see what interest you have.

Is it a property that a first time buyer would purchase as if so, I would serve a S21 and sell as an empty property. Your mortgage company may also give you a payment holiday when you are selling (I managed to negotiate this with my provider when I had to wait for the tenant to be evicted).

Have a look at the landlord forums as I found them helpful so I was making sure my lettings agent followed all the correct procedures.

I sold the property within 3 months of putting it on sale but the final completion happened probably 8 months later. From my perspective I was prepared to wait this long for the sale as I was an accidental landlord as the house was part of an inheritance, and I wanted to sell due to buying my own house.