The last five years have seen a huge expansion in the 'buy to let' market. With this expansion, Andersons have developed a niche market for Landlords wishing to sell investment properties.
- Why sell a property as an investment rather than with vacant possession?
- Are
the tenants obliged to allow prospective buyers to view the property?
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Why sell a property as an investment
rather than with vacant possession?
As you are able to regain possession of a property let on an Assured Shorthold Tenancy by serving notice to expire at the end of a fixed term, you have the option of selling with vacant possession. If this resulted in a higher price being achieved, then this would be the best option. However, there are advantages to selling with a tenant 'in situ' if a similar price can be achieved.
Rent is collected by a landlord up to the day of completion of a sale and all of the utilities are paid by the tenant. On the other hand, a vacant property is producing no income and incurs some costs. Selling can be particularly frustrating when a buyer backs out at the eleventh hour. If the property is let, the continued income can soften the blow whilst a new buyer is sought.
When selling a vacant property, a buyer may sometimes assume that the vendor would be keen to accept a low offer in order to achieve an early sale. The vendor of a rented property is able to take a more objective view of offers received, and is likely to be under no immediate pressure to accept a low offer.
Over many years we have been successful in selling many tenanted properties to other landlords.
Are the tenants obliged to allow prospective buyers to view the property?
Our tenancy agreement contains a clause which permits the Landlord or his agent to show the property to prospective buyers at any time. The tenant must be given reasonable notice of the viewing and the buyer must be accompanied by the selling agent.
Are the tenants likely to put a buyer off?
The situation has to be handled sensitively. Usually a visit to see the tenant would be arranged prior to marketing so that the proposal for selling the property can be explained to the tenant. This gives the tenant an opportunity to ask questions and they can often be reassured. For example, it is explained that an existing tenancy is likely to be viewed as an advantage by a new landlord, and that a buyer who would continue to let the property is being sought.
It
is possible that a buyer may wish to occupy a property as their own
home. In this situation, the tenant is entitled to remain in the property
until the end of a fixed term tenancy; if they are on a statutory periodic
'monthly' tenancy, it would be necessary to serve notice of two months
from a rent day. In practice, the buyer's solicitor would often be reluctant
to exchange contracts until vacant possession had been confirmed.
Will I pay capital gains tax?
The Inland Revenue will assess the gain that you have made. You are able to deduct from this gain the costs which you have incurred in selling the property, the costs incurred when you first acquired the property, and any capital expenditure. In addition there are other allowances which would partially remove the effects of inflation and in any one tax year an individual has a tax free allowance of approximately £7,900. This is doubled if the property is owned in joint names.
How do you promote the property?
In order to ensure that the best price is obtained we will always recommend that the property is advertised for sale on the open market. Regular advertisements are placed in the Sutton Coldfield Observer and the property will be promoted on our web site. Sales particulars are prepared in the usual way and are available from our High Street Offices. Details are circulated to our mailing list.
As we have been letting and sales agents for 15 years, we are often approached by prospective Landlords who are considering their first purchase. We also act for Landlords who have a portfolio of properties which they may be considering expanding.
If you require any further information regarding our specialist investment property sales service, please contact on 0121 240 8100
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Anderson Estate Agents 2004
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