Selling a house with a tenant question

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Sarah_B
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Selling a house with a tenant question

Postby Sarah_B » Mon Feb 09, 2015 9:45 am

I’m after some advice for a friend please.

My friend bought a house in Sheffield which she now rents out due to living and working in Manchester. She rents a flat in Manchester.

My friend would like to sell her house in Sheffield but is concerned if she puts her house on the market and it takes a while to sell the current tenant may leave. She does not have enough money to pay both her mortgage on her house in Sheffield and the rent on her flat in Manchester without the income of her tenant.

My friend just sees her house in Sheffield as hassle and wants to get rid of it. She is looking to sell it to a company that will buy it from her with a tenant in it. My concern is that I’m sure this company will offer her well below the market value for her house however I can also understand the predicament my friend is in that she would struggle to pay her mortgage and rent without a tenant in her house. I should add the tenant is not on a long lease.

I do think many potential tenants are put off renting somewhere if the house is up for sale.

Any advice gratefully received as I’m not sure what the best option is. My only advice so far has been to assess what you think your house is worth (looking on Zoopla etc) and compare that to what the company is willing to buy her house for.

munchkin
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Re: Selling a house with a tenant question

Postby munchkin » Mon Feb 09, 2015 10:04 am

Sarah
It really depends what sort of house it is and what the rental yield is. You can sell quickly at auction to investors who are looking for rental yield but the amount they will pay depends on yield, location, etc. so would usually be below the price you would get for a residential sale.

Is the tenant on an AST ? If so they will only have 1 month or the balance left on 6 months notice period so during a 'normal' sale the tenant might leave and it would be difficult to find a new tenant - they wouldn't necessarily want to move in to a house that is for sale and your friend would then be stuck with a new 6 month AST.

BUT If she sells the house normally (giving the tenant notice at the appropriate time) then she will probably get more money. I would suggest she investigates other sources of funding for if the tenant leaves while the sale is taking place then talk to estate agents, auctioneers to get an idea of the price she would obtain in each scenario then work out which is the best deal for her

Sarah_B
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Re: Selling a house with a tenant question

Postby Sarah_B » Mon Feb 09, 2015 10:19 am

Thank you munchkin for your reply.

I don't know the exact details of how much her house is worth or what she charges in rent.

I agree if my friend was to sell her house via the normal route she would definitely get more money but she isn't sure how long the house would take to sell and the house would most likely be empty as well.

At the moment I have asked her to get a quote from this company that is willing to buy her house from her and compare that with the market value. Getting a loan may be an option to pay the mortgage payments but knowing my friend she would just get stressed of never finding somebody to buy her house. Looking at typical auction values may be an option too.

lister
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Re: Selling a house with a tenant question

Postby lister » Mon Feb 09, 2015 10:45 am

Tell her to research some of these companies.

They'll initially offer 70-80% of market rate, then immediately before exchange of contracts, they will drop their offer substantially.

Others actually market the property throughout the buying process, and delay the purchase until they have secured a buyer - so she could be waiting some time regardless.

Much better to go to a local estate agent and explain the situation, they'll be able to price to sell.

ash pole
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Re: Selling a house with a tenant question

Postby ash pole » Mon Feb 09, 2015 8:50 pm

In my experience it takes at least 2-3 months to buy a property. Could your friend assure the tenant that they'd get say 3 months notice once the sale is agreed? This may get them to stay on. Just a thought.

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annie
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Re: Selling a house with a tenant question

Postby annie » Tue Feb 10, 2015 3:36 am

I'm feeling more sorry for the tenant. Not only will the owner of their home change, but their will almost certainly rise as a result.
One must always be wary of the march of the right-wing. I advocate public flogging/confiscation of assets/rehoming of their young

ollie_the_brave
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Re: Selling a house with a tenant question

Postby ollie_the_brave » Wed Feb 11, 2015 2:38 pm

annie wrote:I'm feeling more sorry for the tenant. Not only will the owner of their home change, but their will almost certainly rise as a result.


Why would the rent rise 'almost certainly''??

If the property is sold to a landlord he/she may very well be more than happy to keep a tenant on paying the same rent. Annie has no information to support otherwise. Nor in the OP's question is this really a consideration....

However, many landlords do purchase properties with sitting tenants because it saves a LOT of time and money in finding a new tenant.

I would advise your friend to consider their options carefully:

How much equity is in the property?
What is the current market value with or without sitting tenant?
Could they re-mortgage to a better deal and as thus does keeping the property become an option whilst releasing any equity?
What are the tenants current thoughts about their future - are they keen to stay or are they keen to move?

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annie
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Re: Selling a house with a tenant question

Postby annie » Thu Feb 12, 2015 1:35 pm

ollie_the_brave wrote:Why would the rent rise 'almost certainly''??

If the property is sold to a landlord he/she may very well be more than happy to keep a tenant on paying the same rent. Annie has no information to support otherwise.


Seems to have happened to a few people that I know in this situation. Go figure.
One must always be wary of the march of the right-wing. I advocate public flogging/confiscation of assets/rehoming of their young

ollie_the_brave
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Re: Selling a house with a tenant question

Postby ollie_the_brave » Thu Feb 12, 2015 1:41 pm

annie wrote:
ollie_the_brave wrote:Why would the rent rise 'almost certainly''??

If the property is sold to a landlord he/she may very well be more than happy to keep a tenant on paying the same rent. Annie has no information to support otherwise.


Seems to have happened to a few people that I know in this situation. Go figure.



Sorry, silly me. It's happened to one or two of Annies friends. As thus we can all be assured its 'almost certain' to happen.

munchkin
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Re: Selling a house with a tenant question

Postby munchkin » Thu Feb 12, 2015 2:16 pm

annie wrote:I'm feeling more sorry for the tenant. Not only will the owner of their home change, but their will almost certainly rise as a result.


I think you are right to think of the tenant. While I don't agree that the rent will necessarily rise , it might well do IF the house is sold to an investor. The investor is looking to set a market rent and that's not always true for an owner who is perhaps just renting out a house they have moved out of. It's quite common for someone to set the rent at a level to say cover the mortgage and not even consider market rents in the area , they are less likely to update the rents on a regular basis either. So I would feel sorry for the tenant if they were turfed out or had a big rent rise - I really think the landlord/seller should have some sort of dialogue with the tenant to try and resolve this.

ollie_the_brave
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Re: Selling a house with a tenant question

Postby ollie_the_brave » Thu Feb 12, 2015 3:05 pm

munchkin wrote:
annie wrote:I'm feeling more sorry for the tenant. Not only will the owner of their home change, but their will almost certainly rise as a result.


I think you are right to think of the tenant. While I don't agree that the rent will necessarily rise , it might well do IF the house is sold to an investor. The investor is looking to set a market rent and that's not always true for an owner who is perhaps just renting out a house they have moved out of. It's quite common for someone to set the rent at a level to say cover the mortgage and not even consider market rents in the area , they are less likely to update the rents on a regular basis either. So I would feel sorry for the tenant if they were turfed out or had a big rent rise - I really think the landlord/seller should have some sort of dialogue with the tenant to try and resolve this.


Agreed. Its also perfectly possible that an investor landlord could buy this property with a sitting tenant who is a good regular rent payer, no hassle and keeps the place in good order. That landlord would be foolish to risk losing a good tenant for the sake of nudging the rent up in the short term.

The tenant may well be thinking of moving on anyway, or may be thinking of settling there for several years - only one way to find out....

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annie
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Re: Selling a house with a tenant question

Postby annie » Thu Feb 12, 2015 3:09 pm

ollie_the_brave wrote:
annie wrote:
ollie_the_brave wrote:Why would the rent rise 'almost certainly''??

If the property is sold to a landlord he/she may very well be more than happy to keep a tenant on paying the same rent. Annie has no information to support otherwise.


Seems to have happened to a few people that I know in this situation. Go figure.



Sorry, silly me. It's happened to one or two of Annies friends. As thus we can all be assured its 'almost certain' to happen.


Oh go stick it up your arse. Don't lock horns with me over an off-the-cuff comment, you little man.
One must always be wary of the march of the right-wing. I advocate public flogging/confiscation of assets/rehoming of their young

stephennewton
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Re: Selling a house with a tenant question

Postby stephennewton » Thu Feb 12, 2015 6:32 pm

I guess it's a shame the tenant doesn't want to buy the house, or maybe they haven't been asked? Buy-to-let has worked out badly for many and this has increased incidents of landlords treating their tenants shodilly.

ollie_the_brave
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Re: Selling a house with a tenant question

Postby ollie_the_brave » Thu Feb 12, 2015 9:02 pm

annie wrote:Oh go stick it up your arse. Don't lock horns with me over an off-the-cuff comment, you little man.


Ah the usual from Annie then.

Someone challenges her sweeping statement
She can't back up her claims and this is pointed out to her
She resorts to personal insults
Stick around, soon we will hear that 'everyone is baiting Annie'

For the record, I'm 6'2" and about 14 stone. Certainly not little.

Sarah_B
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Re: Selling a house with a tenant question

Postby Sarah_B » Sun Mar 08, 2015 8:14 pm

stephennewton wrote:I guess it's a shame the tenant doesn't want to buy the house, or maybe they haven't been asked? Buy-to-let has worked out badly for many and this has increased incidents of landlords treating their tenants shodilly.


The tenant is approximately 3 months late with the rent he owes and is very unlikely he would wish to purchase the house.

I agree there are no winners in situations like this.


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