Selling flat with tenants in situ?

[Shalneeh]

Last year I moved in with my partner and rented out the flat I previously lived in and owned. But I don't really want to be a landlord. The flat is managed by an estate agency and the tenants are on a shorthold tenancy agreement for another 6 months. They are lovely and I don't want to cause them any inconvenience. Rather than ending the tenancy agreement when the time comes, shall I try to sell the flat with tenants in situ now? Does it cause the tenant any issues the landlord sells the flat (since it is managed by the estate agency I wouldn't think so, because they wouldn't even need to communicate with the new owner about any maintenance questions that arise).

I don't have any experience with this, I realise that I might get a bit less for the flats with tenants in situ than I would otherwise, but I thought I might as well try to sell now - best case scenario is that I get an amount I'm happy with, can stop being a landlord, and the tenants can continue the tenancy beyond the initial period, so everyone wins? But I'm happy to be told that I'm wrong and that's not how it works!

I wouldn't buy a flat with tenants in situ. Too risky - it can be very hard to evict tenants.

Speak to your letting agency and get their advice .

It's very hard to sell a property with tenants in situ, I think only cash buyers can do it as to get a mortgage you need vacant possession.

It's not fair on the tenants either, why should they have to put up with viewings while they are paying you rent to live there and a new owner doesn't benefit them and in fact could end up with them being homeless?

Most people don't want to buy with tenants in situ because they can hold tight and refuse to move.

Estate agents, irrespective of your instructions, will put immense pressure on them to make themselves available for viewings, sometimes repeatedly in one day, sometimes by blackmail: 'her parents are only in the country today and she really wants to see it, can we come in an hour?'

It's a bit of a shit move selling with them still there.

That said, it's a bit of a shit move turfing them out when they still potentially have an affordable roof over their heads for a very long time until you actually get to exchange/completion.

You can't win, really.

Or, sell to a LL with 'tenants in situ' and the new LL has to take over the tenancy.

You are basically limiting yourself to landlords looking to buy.
If the flat is empty, people wanting to live in the house can also purchase without risk of the tenants not leaving at an appropriate time.

You are also making your tenants responsible for preparing the flat for viewings, which is unfair.

Sell it empty.

Viewings are a real inconvenience to tenants. They may or may not tidy up and clean for them, they are likely to want to be in for the viewings, and if they do tidy you can expect them to tire of viewings extremely quickly.

From the tenants' point of view I think I would rather you waited.

Now isn’t a good time to sell. The market is stagnant and sellers are having to reduce or accept low offers. I know it’s a PITA, but I’d hang on to it and reassess 3months before the end of the tenancy or renewal. Properties put on the market in Jan/Feb tend to get the best prices with sales hitting in Mar.

@Twiglets1 no you don’t. You get a buy to let mortgage.

Don’t! You won’t get a great price. Even if they keep the house beautifully normally it won’t be when people come round etc. I’d see out the tenancy then sell empty.

It's not just that you'll get a 'bit less' for the flat with tenants in situ. You'd probably have to almost give it away as so many potential viewers won't even consider buying where they'd have to immediately attempt an eviction.

This is just daft.
Give the tenants a long notice to leave. Sell the flat with vacant possession. Otherwise you ll suffer a penalty worth thousands, as the market for tenanted properties is really small.

Most people don't want to get a buy to let mortgage though because they are buying a place to live in?

@Shalneeh could decide to only sell to people with buy to let mortgages but that would severely limit the number of people who could buy their property.

Plus ethically it would be better to offer it to owner occupiers as well as landlords.

You could also give your tenants first refusal and plenty of notice.

Why? The housing crisis is most acute for renters, not owner-occupiers.

Maybe you’ve sorted it by now but people often buy commercial premises that’s what yours would be. It’s tenanted.

Disagree.
I am selling my rental because if there is Labour government you can bet they will want to punish evil landlords.
Have given the tenants the required 2months notice so as to have vacant possession.
My property is close to very sought after state school in an area where lots go private, so the agent is confident we’ll get a good price from parents hedging their bets on the VAT issue.
The tenants are obliged by the contract to allow viewings in the notice period.