Hello, I would like to sell my rental house, the tenants are on a periodic tenancy. Do I need to give them 6 months notice? What experiences do people have of selling with tenants in situ? The house is a bit of a mess, I thought of tidying up after they leave and then selling. Is it worth it?
Yes to six months notice
The cost depreciates with tenants in situ
If you want a good price you need to sell it in good condition without tenants
Depends how quickly you want rid and what you want to achieve.
You could sell at auction with tenants insitu. Some investors prefer it but you may well achieve a lower price.
In answer to your last question, yes - it is worth tidying up the house before putting it on the market.
Thanks, it looks like they need to be out before selling then. I only have 1 house and I feel awful asking them to leave during this covid time. They are a bit scruffy and the garden is a tip, but they pay on time and don’t cause me any problems. Any tips on how to give them the news?
You should be aware that it could take a lot more than 6 months if the tenants are unwilling to leave and you have to go to court, so I would try your best to keep them on side.
How desperate are you to sell?
Send them the section 21 and attach a nice letter to it.
Say your personal circumstances have changed and it is with regret that because of this you sadly need to ask them to leave.
You could also say that if they find somewhere suitable before the six months are up you are happy to release them early at a date suitable for them (if this is the case) so they need not worry about coordinating everything and you will give them a good reference and are happy to help them if you are able.
Or you could ask estate agents in your area of they have any investors on their books who are looking for properties with tenants in-situ.
Again, you may get less for it selling to another landlord but possibly still get more than selling at auction.
Thank you for this, several good suggestions. I’m not desperate to sell, I’m just not making that much yield on it and investing in a pension seems more attractive at the moment. I need to stop feeling sorry for asking a young family to leave, trouble is they have had cheap rent for years with me and they may struggle to find an alternative at the price they are used to paying. I need to man up and just do it!
you must rent out at the market price or just below
It’s very difficult, know how you feel, I was too soft too, which caused me various problems along the way.
Or you could increase the rent a bit? Enough to give you more but still cheaper than what they would pay elsewhere. If you felt able that is!
No harm in asking the local auction house, no obligation to sell. A lot of properties achieving way over the guide prices at the moment. Auction houses usually publish the results of previous auctions on their websites. Might be interesting to look.
If you want to stuff your pension I’d look into remortgaging rather than buying. You can only pay 40k a year into a pension anyway. What sort of capital gains do you expect from the sale?
As Colin has indicted very kindly. If the rent yield is too low and is too cheap?.increase the rent whether you sell or not.
It depends on the value of your house, and whether or not there is a large margin between vacant and occupied values. Check with local agents.
You need to consider the length of time it will likely take to sell, and factor in your loss of rent, council tax liabilities, maintenance and security, since an empty property still may need attention.
Whatever you decide, you need to raise the rent to market rates, you’re running a business not a charity.
I would also make the tenants aware of their obligations to maintain the property and garden. Issues left unattended for long periods of time can become major issues, if not kept up with on a regular basis, particularly gardens.
You need to send them “ notice to leave” you can get it on the government website, 6 months notice is required due to COVID.
I have just put my house on the market with tenants & luckily I have photos of the house before they moved in which are currently being used by the agent, so far the people who have viewed have not been put off & know my tenants can’t leave until July, this seems to be in my favour as viewers are also selling their property which gives them time to have things in order. There’s not a lot you can do about tidying inside the house but if your able to sort the garden which does help.