While many investors firmly believe in the general rule that you should “buy and never sell”, there are many personal and financial reasons why you might want to sell a property.
Once you have decided to sell, you’ve got another decision to make: Are you selling your property with or without the tenants?
The question is easily answered if you’ve got a property which is occupied by multiple parties as it is more valuable for another investor taking over if it is fully occupied.
What about a house with one rental party only though? Will it be off-putting for families wishing to purchase a home for themselves if this is already occupied? You might feel worried about limiting the number of potential buyers by making the property appeal only to other investors.
Even with these considerations taken into account, the obvious answer is to keep the tenants as this incurs the least loss of income and - unless the house is really messy - it usually looks better with furniture as it makes the place looked lived in.
However, there are times when a tenant could cause problems. Tenants who do not want to move can put a lot of obstacles in the way of a sale, for example by limiting and postponing inspection access almost at whim.
The legal obligation of the owner is to give the tenant two weeks written notice before first inspection and conduct subsequent inspections as agreed with the tenant or, if there is nothing agreed, no more than two inspections per week, with 48 hours notice each time.
Having to arrange inspection times with an unwilling tenant will cost you valuable time and might mean that potential buyers will have moved on by the time you’ve sorted this out. Disgruntled tenants can also have a negative impact on the sale process if they highlight the property’s faults in order to put off prospective purchasers.
Some property owners don’t realise that tenants will behave badly in the event of a sale, but there is a bit of basic research that will help you find out whether the tenants are likely to cooperate.
Ask your property managers how easy it has been to get access for periodic inspections or for tradespeople. Tenants who have been slow to grant access for activities such as repairs that will benefit them are even less likely to grant it when they think they will ultimately lose their home to a successful purchaser.
Even better than trying to find out how your tenant is doing is to employ Prudential Real Estate to handle your property management to begin with as we treat tenants in a way that makes it highly likely that they will treat you with respect in return.
As we foster a positive relationship with tenants by keeping repairs up to date and being reasonable about requests, most tenants are likely to help out in the event of a sale even if they don’t want to move.
As the tenants have learnt to trust us in the past, they will be happy to rely on us to find them new accommodation should they need to move out after the sale and we will keep them informed about the role they play in the selling process - a situation we have successfully handled many times in the past. We have even created a brochure with advice that we provide them with to help them through the sales process.