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Tenanted properties are those where someone lives in exchange for paying the owner of the house or flat a regular rent, and there can be various complications associated with trying to sell this type of home. Below you’ll see four general ways that you can improve your odds of selling such a property fast and for a fair offer, including the potential to avoid paying any fees.
- What is a tenanted property?
- Know your legal duties with selling a tenanted home
- Improving the look of your tenanted property for sale
- Fixing problems with a tenanted home before selling
- Four ways to sell your tenanted property
- Top queries about selling a tenanted house or flat
What is a tenanted property?
A tenanted property, also referred to as a buy-to-let property, is one where you have purchased a house or flat and then you rent it out to someone who lives there for a set number of years in exchange for paying you a monthly or annual sum. The renter, also known as the tenant, does not have any type of leasehold or freehold ownership right over the property.
Usually, this type of home will be freehold, which means that you are the outright owner of the house or flat, as well as the land on which the building is located, but you don’t live there.
The exact terms of the tenancy will be laid out in an agreement between the property owner and the person who plans to live there, as the charity Shelter explains, and they’ll be specific to that home.
But what if you own a tenanted property and want to sell it?
This guide answers that question by offering useful tips in four broad categories for how to sell a tenanted house or flat, including what to tell your existing tenant, steps you can take to make the home more appealing to prospective buyers, your legal responsibilities when selling this type of home, and how to best attract a competitive and quick offer from a buyer.
Know your legal duties with selling a tenanted home
The first overall tip for selling any kind of tenanted house or flat is that you need to know your duties under the law as it applies to the people who are currently renting the property.
Your tenants have a number of legal rights, at the UK government’s website notes, and it’s important that you respect these and comply with your various obligations under the law before trying to sell the house or flat. Failure to follow these requirements could create legal complications in your bid to find a buyer.
It’s perfectly legal to try and sell a tenanted home that people are living in under the terms of an existing long-term rental agreement. But you must alert your tenant to the fact that you’ll be looking to sell the property, because you don’t want them to be surprised by this.
And some tenants might want to purchase your home and continue living there as the new owner, so they need to be given the right to make an offer as part of your selling process.
The vast majority of tenanted properties are sold without any serious complications, but you could encounter a problematic tenant that objects to the home being sold. They can create hurdles to selling, such as making a mess of the place before any viewings happen, which can discourage prospective buyers and extend the selling process by many months.
In such a scenario, you should ensure that you have met all of your legal duties as the landlord of the property in case you need to take legal steps to bring the tenancy to an end quickly. If you can show that you have fulfilled your side of the tenancy agreement then this will make it much harder for your problem tenant to fight your effort to evict them from the flat or house.
Improving the look of your tenanted property for sale
The third general tip for selling any type of tenanted home is making sure that it looks in the best possible well-maintained and tidy condition before you attempt to invite offers on it.
Depending on the method of selling that you choose, you might need to have dozens or more viewings where people can come to tour the inside and outside of the property before deciding whether they want to buy it. You should keep your tenant updated well in advance of any viewings, so that they clean the house or flat before a potential buyer arrives.
If the tenant is reluctant to do this work, you can always volunteer to come to the home and clean the various rooms, removing as much clutter as you can. This will help the property to appear more spacious and therefore more valuable, which should hopefully result in would-be buyers making higher price offers that could result in a better sale profit for you.
Outside the property you can also see if there are visual improvements that you might be able to make, and you should give the tenant advance notice of any such work. This can include giving window ledges a fresh coat of paint, replacing roof tiles, mowing a garden, and more.
It can also be a great idea to take plenty of photographs of your tenanted home when it’s in the best possible condition and cleanest, so that you can use this in your listing, which is used to attract buyers by describing the property and including pictures of the interior and exterior.
These steps might seem simple but they can have help to increase the perceived value of your property, and the higher the price that someone offers for your tenanted home, hopefully the higher the sale profit.
Fixing problems with a tenanted home before selling
Before you make the final decision on how to try and find a buyer for your tenanted property, you may need to think about whether to repair any structural damage that might currently exist at the home.
If the house or flat currently has a major physical flaw like subsidence, asbestos, dry rot, damp, a broken boiler or similar issues, buyers need to be told about them. Trying to conceal this information from these problems is against the law, and could result in your facing penalties if someone were to buy the property and then discover whatever the issue might be.
Having this type of flaw at your home can lead to a reduced sale price, because buyers will likely reduce their offer by the amount of money that they expect it will cost them to address the problem as the next owner. This in turn will mean less profit for you from the sale.
Fixing significant structural issues is certainly an option for owners before they attempt to sell their properties, as Conveyancing Store says.
But depending on the size of the problem, it could require a significant amount of money, effort and time to address the issue before seeking a buyer. And for homeowners who are trying to either sell as fast as feasible or to keep costs low, this might not a viable approach. The good news is that owners in such situations will still be able to sell their properties.
Instead of investing in fixing the structural flaw with their tenanted home, an owner could instead get in touch with a quick buyer like LDN Properties, because these companies are well known for making fast and fair offers to purchase all types of leasehold and freehold houses, flats and other properties – including those that have structural faults in need of repair.
Four ways to sell your tenanted property
Perhaps the most important choice you’ll make when trying to sell a tenanted property is the method you want to use for finding a buyer. Your four selections are usually selling with an estate agent, selling to a quick home buyer, selling at an auction or selling on your own.
To find the selling method that best matches your needs, consider writing down your top priorities such as whether you are open to paying commission, how long you are prepared to wait to sell, and your target selling price. Then compare these factors against the specific details of the four options below in order to narrow them down to the most suitable selections.
There are notable downsides linked to some of the choices, like having to wait more than a year to find a buyer when selling without any assistance. Other options have strong benefits, including being able to sell within weeks when you contact a quick buyer like LDN Properties, and this timeline covers not only exchanging contracts but also receiving the sale proceeds.
Selling with an estate agent
If you want a reduced workload with the sale of your tenanted property, you could use the services of an estate agent. They’ll prepare a listing, advertise it, organise viewings and hear offers from buyers, with the aim of taking a serious offer through to exchange of contracts. But you’ll have to pay the estate agent a fee in exchange for them putting in all of this effort.
Typically, estate agents will charge commission within a range between roughly 1.15 percent and 1.40 percent of a property’s final sale price, although it can be higher or lower depending on the specific company, as described on the HomeOwners Alliance’s website. Always check with individual estate agents to find out what they’ll charge.
You might also be waiting a very long time to sell your tenanted home this way, as it may take many months or even more than an entire year before you find a buyer. Also, someone can make an offer to buy your property but then withdraw it and cause the sale to collapse, which they can do without penalty so long as contracts have not yet been exchanged. This will mean you’ll have to start again with finding a buyer, extending your sale timeline much further.
Some estate agents could also quote an overly ambitious sale price for your home, even if they know it’ll only attract buyers at a much lower value. They use this trick to convince you to sell using their services, so that they can profit from the eventual commission you’ll pay them.
To avoid falling for this, visit property sales websites like Rightmove and Zoopla and write down the current and past sale prices of tenanted homes that are similar to yours. Next, get a number of free sale price quotes from various estate agents. Finally, calculate the average of these values to get a better rough estimate of your property’s potential sale price.
Selling to a quick home buyer
One of the speediest ways to sell a tenanted home is getting in contact with a quick buyer like LDN Properties. These companies have the money available upfront to purchase properties immediately, with no waiting for weeks or months to first get authorised for a mortgage. This cuts the typical sale timeline down to a few short weeks, including the exchange of contracts.
You will not have to pay any commission if you choose to sell your home to a genuine no-fee quick buyer, which means that you can count on receiving the full sale proceeds. That’s often preferable to selling via an estate agent or auctioneer and having to pay them commission, which will be subtracted from the eventual proceeds and therefore add to your expenses.
If your tenanted home has any kind of structural flaw or other problem, quick buyers can also be a good option because they are used to making fair and fast offers to purchase practically any age, condition, location, shape, size or type of leasehold or freehold property.
LDN Properties, which launched more than 15 years ago, has purchased and made offers for many tenanted homes throughout the UK, in addition mansion block flats, mixed-use properties, smoker’s homes, houses with spray foam insulation, flats that have a short lease, properties built using reinforced autoclaved aerated concrete, flats that have a broken boiler, underpinned properties, houses situated near to a cliff, homes with equity release, flats that have service charge arrears, Tyneside/Crisscross houses, properties that have a flat roof, homes that have a green deal and many other type of properties.
And for your additional peace of mind, you can ask specific quick buyers if they can prove they are members of an independent organisation known as The Property Ombudsman (TPO), which publishes policies to shield owners from scams in the quick buying industry. All honest TPO members, including LDN Properties, must comply with these regulations. Be careful selilng to a company that cannot prove it is a TPO member because it could be fraudulent.
It’s fast, free and simple to check the membership status of a quick buyer – just go to TPO’s website, click on the "Find a Member" tab on the welcome page and then type in the company’s name. If they are truly registered with TPO then you’ll be shown their membership details.
Selling at a property auction
There’s no assurance your home will sell when you use a property auction, where people will have the chance to place bids of increasing prices on your home. If you receive zero bids then it remains unsold and you’ll have to start over seeking a buyer, delaying the process further.
You could receive just a single bid at the reserve price, which is the lowest price at which you agree your home can sell. This is a legally binding agreement to sell your home, so you must choose a price that should result in a profit from the sale, even after paying the auctioneer their fees, otherwise you run the risk of only breaking even on the sale or selling at a loss.
Auctioneers will charge an average of 2.5 percent of your property’s final sale price for their commission, and this will cause your expenses to rise because it will be subtracted from the final sale proceeds. You may be able to negotiate a lower rate of commission with the auctioneer, or have the buyer pay some of your fees, so ask whether this could be feasible.
This is far from the swiftest choice for selling a tenanted property, with a wait of many weeks or months between the day on which you decide to sell your home this way and the day on which the auction takes place. Then, if your property does sell the auction, the buyer has an average of 28 days to sign the required papers and finish the other tasks needed to complete the sale.
You could ask individual auctioneers if they are open to setting a shorter deadline than 28 days for the buyer to handle their mandatory tasks, as this can speed up the process. Just note that some auctioneers could give the winning top bidder even more time than 28 days.
Selling without any assistance
The fourth method available for selling your tenanted property is doing so on your own, which means no help with any of the steps from an estate agent or auctioneer.
There can be a lot of work to do, including the initial creation of a listing, advertising it, organising viewings, showing people around the property, and hearing offers from buyers. Expect it to take up a lot of your time, and it can be very stressful if you have never sold a home before – in which case it might take more than an entire year before you are able to find a buyer.
Even then, someone can make an offer to purchase your property but then cancel it, causing the sale to collapse. They can do this without facing any penalties if you have not yet exchanged contracts. And it will add much more time to your selling schedule because it will require you to being again with the process of trying to find a buyer for your home.
Therefore, you may want to only consider pursuing this method of selling if you have experience with finding buyers for tenanted properties, or there’s a suitably qualified family member or friend that may be willing to assist you at no charge with the various steps in the selling process.
One advantage, however, of selling this way is that you will avoid having to pay any commission to an auctioneer or estate agent, so that can assist you in keeping your costs low. But this saving might be wiped out by the funds you spend on marketing your listing and other steps.
As an alternative, you could get in touch with a zero-fee quick home buying company like LDN Properties, because this would allow you to not only avoid paying commission but also to get a much more rapid sale. On average, quick buyers can finalise the process of buying almost any property within a handful of weeks, and that includes the time taken to exchange contracts.
Top queries and answers about selling a tenanted property
If you are considering selling a tenanted property you may want to ask us some questions before making a final decision, ranging from steps needed before selling through to helping improve the chance of getting a quick sale. Here are some of the top questions you could ask to help you sell your tenanted property:
Your top questions when selling a tenanted property
Tenanted properties are typically those where you are the freehold owner of a house or flat and the land on which it was constructed, but you do not live in the home and instead rent it out to someone who lives there for a set number of months and years, and they pay you a regular rent. Unlike a leaseholder, a tenant will not have any legal ownership right to the property.
It’s important that you fulfil all of your statutory requirements and other responsibilities as the owner of a tenanted property, and this includes informing your existing tenant that you intend to sell them home, so that they have the chance to make an offer to buy it if they want. You’ll also need to provide sufficient notice if you need to evict a tenant to make a sale happen.
You can create the appearance of a more-valuable property by cleaning the interior and removing and clutter, and improving the look of the exterior through steps like replacing missing roof tiles or giving window ledges a fresh coat of paint. Be sure to let your tenant known when potential buyers are visiting the property, so that they can clean it before such viewings.
If there’s a major structural problem at your property, for example widespread subsidence, then you may need to think about whether to spend money, time and effort on resolving this before you sell. The problem can make some buyers view your home as less valuable and therefore worth a lower offer, but note that you are not required to fix such issues before selling.
You won’t have to pay any commission when selling your tenanted home if you get in touch with a zero-fee quick buyer like LDN Properties, or you sell without any help. But you will have to pay commission to an auctioneer or an estate agent if you use them to sell your house or flat, and this fee will increase your costs because it’ll be taken out of the final sale proceeds.
The timeline for selling will be dependent on the method you use for seeking a buyer, with the fastest option sometimes being a quick home buying company like LDN Properties. You can expect to be waiting many months or longer if you decide to instead sell on your own, with an estate agent or trying your luck with a property auction.
You can ask the company if it is registered with The Property Ombudsman (TPO), a third-party entity that writes rules to guard owners from fraud in the quick buying sector. Genuine TPO members, like LDN Properties, must adhere to these policies, giving you peace of mind.
