The National Residential Landlords Association and Movewise have released a comprehensive guide on selling investment properties. The guide is designed to assist landlords in preparing for a sale, whether the property is vacant or occupied by tenants, and whether the target buyers are investors or the general market. Following these seven steps outlined in the guide can maximize the returns on your buy-to-let investment. Additional online resources are also available for further guidance.
Timing is key when deciding to sell a property. If you have the luxury of time and aim to secure the best price, waiting can be beneficial. Spring, known as the busiest season for property searches, sees a significant increase in buyer interest starting from January. To beat the rush, Movewise advises listing your property early in the New Year.
Is it the right time to sell:During the rest of the year, there is a noticeable summer slowdown as potential buyers are away on holiday or occupied with family matters. However, this lull is often followed by a surge of interest in September, making it another opportune time to enter the market.
Should you sell with tenants? Or without?: When selling, the decision to keep tenants or have a vacant property is crucial. A vacant property appeals to a broader range of buyers, including both investors and owner-occupiers, offering a higher chance of selling at a favourable price. However, the current trend of landlords selling has reduced the availability of rental properties. Therefore, Movewise suggests considering selling with tenants in place, particularly to other landlords, whenever feasible.
Get your property ready: Preparing a property for sale requires careful consideration, whether it is being marketed with vacant possession or with tenants in place. Here are seven important factors to keep in mind: informing the tenants, conducting necessary repairs, maintaining cleanliness and tidiness, redecorating if required, addressing the kitchen and bathroom, tending to the garden, and being transparent about any issues.
Set your price: Pricing your property appropriately is crucial. Overpricing can discourage potential buyers and may necessitate a price reduction, raising concerns about the property. Conversely, setting the price too low can result in financial loss. For investment properties, yield is an additional factor to consider when determining the price. It may be advisable to review the rent as soon as the tenancy agreement permits.
Choose the best sale method: Choosing the most suitable method for selling is essential. While estate agents handle the majority of property sales in the UK, there may be more suitable approaches for investment properties. Movewise has introduced a Property Marketplace specifically designed for landlords to directly market their properties to other landlords.
Sort out paperwork: Ensure your paperwork is in order when selling a property, as there are several crucial documents to provide. Key items include the sales pack/management pack, proof of identity, EPC, title deeds, transaction (TA) forms, gas and electric safety certificates, and documentation related to alterations and extensions.
When selling with tenants in place, additional documents are necessary. These include a signed tenancy agreement, evidence of tenants’ right to rent, inventory, condition report, details of repairs, and information about deposit protection. Remember to transfer the tenant’s deposit to the buyer.
Appoint a conveyancer: Appointing a conveyancer is essential for a smooth transaction. While it is not legally mandatory to use a qualified professional, it is highly recommended to avoid costly errors during the conveyancing process, which involves the official transfer of ownership from the seller to the buyer.