Even when everything goes according to plan, selling your property is hard.
There are many parties, timelines, and budgets involved.
Having tenants in-situ can increase complexity.
But preparing it for sale can help a lot.
What is a tenanted house?
A house is classified as ‘tenanted’ if there are still tenants in-situ while you are selling it.
This may occur because you are unable – or don’t want to – to evict your renters.
Tenanted properties tend to sell for a lower price and may take longer to find a buyer. This is because they are often considered ‘less attractive’ by potential buyers.
It’s challenging to hold viewings or make improvements whilst tenants live there.
Communicate with your tenants
During the selling process, communication is key.
Your tenants may feel nervous about a new landlord coming in. So, you should reassure them, and give them lots of advance notice.
It is in your interest to maintain a friendly relationship with your renters. They can make your life difficult by being non-cooperative with viewings.
Find a convenient way of selling
Selling a tenanted house on the open market usually takes longer to complete.
Potential buyers are less attracted to a property they cannot live in.
So, you should try to find a way of speeding up the selling process, so it does not drag on for months and months.
Some high street estate agents specialise in selling tenanted properties. They have a network of potential buyers who do not object to purchasing a house with tenants.
You may wish to explore other options too, such as using a cash house buyer or a property auction house.
Get a realistic valuation
When you sell a house with tenants, you need to be realistic about what price you will get achieve.
You can use an independent property valuer. They can give you a realistic estimation of how much it is worth.
Estate agencies can offer this, but some people they give inflated prices (to win business). So you are more likely to use them to sell your house.
The nature of the tenanted property will make a difference to its value, for example:
- How co-operative the tenants are (or the presence of problem tenants!)
- Whether damage has been done to the house
- Whether the tenants are able to live there indefinitely
- How long is left on the lease.
Like with all house sales, the market conditions will make a difference to the open market price.
You should ask your valuer for an in-depth explanation about the figure they’ve decided on.
Research the rights of everyone involved
A conveyancer can explain the rights of everyone involved.
You do not want to break any laws. And it will also help to get a clear understanding of what you can/cannot do while selling a tenanted house.
Offer your sitting tenants first refusal
It’s often considered decent to offer your sitting tenants first refusal on buying the property.
Even if they do not have the funds to afford it. They will likely appreciated being given the option. This can help you to maintain a positive relationship during the selling process.
If your tenants are able to buy the house, then this could also speed up the time it takes to complete the sale.
After all, your potential buyers won’t need to be taken on several property viewings. And may be less picky around subjects such as the survey.
Hold viewings in group batches, when possible
If you hold viewings on the open market, it’s better to do it in group batches.
Finding days and times that all your renters can be out of the house may be difficult. So, you should make the most of any opportunity where you successfully arrange it.
In an ideal world, you should speak to your tenants in advance. Find out which days and times work best for arranging viewings.
You could then fit three or four separate viewings into any available slots.
Finding a solution that is convenient for everyone involved is always desirable. Sometimes, virtual viewings are an option.
Get all your paperwork sorted
Documentation is an important part of any property sale. But when you still have tenants in-situ, there may be details you would not otherwise have to think about.
You will usually be required to gather all of the following:
- The signed tenancy agreement
- Evidence of your tenants’ right to rent
- Inventory
- Gas and Electricity safety certificates
- Details of deposit protection
- Condition report and details of any repairs
Your potential buyer will want to know everything possible about the house. All of this paperwork makes that possible.
Allow extra time for the sale, if possible
Selling with tenants can take longer on the open market, compared to a property that has no one living there.
And you may therefore need to allow extra time for that. This is particularly important if there is a specific deadline you need to keep to.
Keep in mind that you will often not need to allow extra time if you use a reliable cash house buyer.
The most trustworthy organisations can get your sale completed within 7 days.
Handle the tenancy agreement and deposit
In most instances, your tenancy agreement will transfer over to the new owner.
But your conveyancer may need to transfer your deposit to the new owner.
