Hi
I am thinking of selling my 2 bed BTL flat in London NW6. It is currently tenanted until 28th February, after which it will be vacant. Any advice on how best to approach selling such a property, or whether to re-tenant, would be warmly welcomed.
Many thanks
Nigel
If you sell with a tenant in situ you should expect offers 15-20% below market value as you can only sell to investors without vacant possession. If it were me, I would serve notice on the tenant, letting them know in advance that you plan to sell and will be as helpful as you can to them. With luck, they will leave at the end of the 6 month notice (if you serve it now). If not, expect eviction to take 12-18 months. Don’t re-let it if they move in February unless you want an even longer wait.
always best to sell an empty place . Then you have widened your market audience
Thanks David,
The tenants have already said they are vacating at the end of the AST (end February 2021) hence my enquiry about options.
I’d still look into making sure you’ve got your legal ducks in a row juuuust in case they change their mind at the last minute. With the chaos we’re in anything can change.
Once they’ve left the property- do a full clean, go in and do any immediate small repairs (cracks in the molding, etc). Do a fresh coat of tasteful but neutral paint. Find a company who can stage it. Then it’s no different to selling any other property.
The question is do you need the capital, are you making a good return, especially with low interest rates on both mortgages and savings.
Do you have a use for the capital at a definite date in the future?
Remember you will have to pay capital gains taxation on the net profit, so if you are a 40% tax payer can you legally reduce your income some way as this will reduce your capital gains demand which must be paid following the sale. I think it’s immediately to 30 days post sale.
So as you’re thinking about selling you have a few other considerations in addition to other suggestions already given. Always redecorate and present at its best so people just move in, it’s a major aide to faster sales. Purchase prices are high at present too, not to say they will go higher or lower in the future.
you are correct C G has to be paid within 30 days
Thanks Brian7
The question of what to do with the capital I have already considered. But presentation for sale is a bit trickier. In the location the flat is, I have been advised by one agent to sell as is (it’s already not badly presented), because the buyer will convert it back to residential use and so is decorating the place actually worthwhile?
Staging may not be,however a fresh coat of paint and covering up any cracks is a one-day process that costs at most a few hundred that can add tens of thousands to the offer price and help it sell faster.
If a buyer walks in and sees cracks and fading paint, it puts them in the mindset that this property was ill cared for and what other problems are there? It causes them to look harder for issues and they’ll mentally tack on a “I’ll likely find problems below the surface so don’t offer too high” to their offer.
If a buyer walks in and sees no visible problems and a fresh coat of paint, it puts them in the mindset that this owner was on top of things and clearly cares about the property so it was likely well kept.
A lot of sales is psychology. Even though you can sit there and think “well these issues are a one-day, few hundred repair it shouldn’t matter”- it makes the buyer more on edge and less willing to part with their money.
I have just sold a property when the tenant managed to get a ground floor flat due to health reasons. We bought our very 1st property tenanted but never again we wont even look at one. That was a nightmare but have had no problems with our own choices. Apart from below market value price it will also put off people like me.